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What changed in Moody's Corporation's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Moody's Corporation's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+333 added−367 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-14)

Top changes in Moody's Corporation's 2024 10-K

333 paragraphs added · 367 removed · 263 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+24 added−32 removed28 unchanged
Biggest changeMoody's received the following awards and recognition for its sustainability- related efforts during 2023: – Named 2022 CDP Supplier Engagement Leader on Climate Action for third consecutive year; – Recognized among America’s 100 Most JUST Companies by JUST Capital and CNBC for its commitment to serving its workforce, customers, communities, the environment, and stockholders; – Named to Bloomberg Gender-Equality Index for fourth consecutive year; and – Ranked #1 on Forbes' Net Zero Leaders list.
Biggest changeIn 2024, Moody's received multiple awards for its sustainability efforts, including: • Recognized among America’s 100 Most JUST Companies by JUST Capital and CNBC for its commitment to serving its workforce, customers, communities, the environment, and stockholders for its sustainability-related efforts; • Made CDP's 2023 Climate Change 'A' List, in recognition of Moody's leadership in corporate transparency and actions taken in response to climate change; • Named to the 2023 Dow Jones Sustainability Indices - World and North America, an annual listing of publicly traded companies, recognizing Moody's for its strong corporate sustainability practices; and • Recognized as a 2023 CDP Supplier Engagement leader for the fourth consecutive year, ranking among the top 4% of companies assessed for supplier engagement on climate change.
However, annual fee arrangements with frequent debt issuers, annual debt monitoring fees and annual fees from commercial paper and medium-term note programs, bank deposit ratings, insurance company financial strength ratings, mutual fund ratings, and other areas partially mitigate MIS’s dependence on the volume or number of new debt securities issued in the global fixed-income markets.
However, annual fee arrangements with frequent debt issuers, annual fees from debt monitoring, commercial paper and medium-term note programs, bank deposit ratings, insurance company financial strength ratings, mutual fund ratings, and other areas partially mitigate MIS’s dependence on the volume or number of new debt securities issued in the global fixed-income markets.
As an early adopter of Gen AI, Moody's expects to be well positioned to benefit from the capabilities of this groundbreaking technology, which will help our customers make better decisions by unlocking deeper, more integrated perspectives on risk.
As an early adopter of Gen AI, Moody's expects to be well positioned to benefit from the capabilities of this technology, which will help our customers make better decisions by unlocking deeper, more integrated perspectives on risk.
Moody’s growth is influenced by a number of trends that impact financial information markets including: Enablement of Gen AI Health of the world’s major economies Debt capital markets activity Disintermediation of credit markets Fiscal and monetary policy of governments Expansion of market for integrated data and analytics solutions Business investment spending, including mergers and acquisitions In an environment of increasing financial complexity and exponential risk, Moody’s expects to be well positioned to benefit from continued growth in global fixed-income market activity and more widespread use of credit ratings and integrated risk solutions.
Moody’s growth is influenced by a number of trends that impact the market for our products, including: Enablement of Gen AI Health of the world’s major economies Debt capital markets activity Disintermediation of credit markets Fiscal and monetary policy of governments Expansion of market for integrated data and analytics solutions Business investment spending, including mergers and acquisitions In an environment of increasing financial complexity and exponential risk, Moody’s expects to be well positioned to benefit from continued growth in global fixed-income market activity and more widespread use of credit ratings and integrated risk solutions.
Our comprehensive solutions support the transformation underway across various industries due to: Operational and reputational risks Digitization Evolving regulatory environment Fluctuations in credit and financial markets Climate change Geopolitical risks MIS Prospects for Growth Strong secular trends should continue to provide long-term growth opportunities in MIS.
Our comprehensive solutions support the transformation underway across various industries due to: Operational and reputational risks Digitization & Artificial Intelligence Evolving regulatory environment Fluctuations in credit and financial markets Climate change Geopolitical risks MIS Prospects for Growth Strong secular trends should continue to provide long-term growth opportunities in MIS.
MA is comprised of: i) a premier fixed income and economic research business (Research & Insights); ii) a data business powered by the world’s largest database on companies and credit (Data & Information); and iii) three cloud-based SaaS businesses serving banking, insurance and KYC workflows (Decision Solutions).
MA is comprised of: i) a premier fixed income and economic research business (Research & Insights); ii) a data business powered by the world’s largest database on companies and credit (Data & Information); and iii) three cloud-based subscription businesses serving banking, insurance and KYC workflows (Decision Solutions).
Financial Statements of this annual report and are herein incorporated by reference. 10 MOODY'S 2023 10-K Table of Contents Moody's Analytics Overview MA empowers financial services, corporate and public sector customers to anticipate risks, adapt and thrive in a new era of exponential risk.
Financial Statements of this annual report and are herein incorporated by reference. 10 MOODY'S 2024 10-K Table of Contents Moody's Analytics Overview MA empowers financial services, corporate and public sector customers to anticipate risks, adapt and thrive in a new era of exponential risk.
Richard Steele, 54 Senior Vice President and General Counsel Mr. Steele has served as the Company’s Senior Vice President and General Counsel since September 2023. Mr. Steele joined Moody’s KMV Company in 2006 as its Chief Legal Officer, and was named General Counsel of Moody’s Analytics in January 2008. Prior to joining the Company, Mr.
Richard Steele, 55 Senior Vice President and General Counsel Mr. Steele has served as the Company’s Senior Vice President and General Counsel since September 2023. Mr. Steele joined Moody’s KMV Company in 2006 as its Chief Legal Officer, and was named General Counsel of Moody’s Analytics in January 2008. Prior to joining the Company, Mr.
None of the Company's intellectual property is subject to a specific expiration date, except to the extent that the patents and the copyright in items that the Company creates (such as credit reports, research, software, and other written opinions) expire pursuant to relevant law.
None of the Company's intellectual property is subject to a specific expiration date, except to the extent that the patents and the copyright in items that the Company holds (such as credit reports, research, software, and other written opinions) expire pursuant to relevant law.
The Company also utilizes generally available open-source software and libraries for internal use and subject to appropriately permissive open-source licenses, to carry out routine functions in certain of the Company’s software products. Most of such technology and intellectual property is available from a variety of sources.
The Company also utilizes generally available open-source software and libraries subject to appropriately permissive open-source licenses, to carry out routine functions in certain of the Company’s software products. Most of such technology and intellectual property is available from a variety of sources.
The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and other information statements that the Company files electronically with the SEC. The SEC’s internet site is https://www.sec.gov/. Information About Our Executive Officers Name, Age, Position and Biographical Data Robert Fauber, 53 President and Chief Executive Officer Mr.
The SEC maintains an internet website that contains annual, quarterly and current reports, proxy and other information statements that the Company files electronically with the SEC. The SEC’s internet website is https://www.sec.gov/. Information About Our Executive Officers Name, Age, Position and Biographical Data Robert Fauber, 54 President and Chief Executive Officer Mr.
Strategic growth drivers : NEW PRODUCT DEVELOPMENT STRONG CUSTOMER RETENTION RATES CROSS-SELLING, UPGRADES & PRICING CONTINUED SAAS TRANSITION INCREASED DISTRIBUTION CAPACITY AND PRODUCTIVITY 20 MOODY'S 2023 10-K Table of Contents Market growth drivers : Customers need to understand a large range of interconnected and emerging risks.
Strategic growth drivers : NEW PRODUCT DEVELOPMENT STRONG CUSTOMER RETENTION RATES CROSS-SELLING, UPGRADES & PRICING CONTINUED SAAS TRANSITION INCREASED DISTRIBUTION CAPACITY AND PRODUCTIVITY 18 MOODY'S 2024 10-K Table of Contents Market growth drivers : Customers need to understand a large range of interconnected and emerging risks.
Key growth drivers include: Long-term Growth Building Blocks Economic Expansion + Value Proposition + Developing Capital Markets • GDP growth drives demand for debt capital to fund business investments • Refinancing needs support future supply • Proven rating accuracy and deeply experienced analysts • Mix of issuers and opportunistic issuance • Deepening participation in developing markets • Meeting customers’ evolving risk assessment demands, including Climate, Cybersecurity, and ESG In addition to the factors noted above, growth in global fixed income markets in a given year is dependent on many macroeconomic and capital market factors including: Interest rates Business investment spending Corporate refinancing needs Merger and acquisition activity Issuer financial health Consumer borrowing levels Securitization activity Expansion of ratings coverage Expansion into emerging markets Rating fees paid by debt issuers account for most of the revenue of MIS.
Key growth drivers include: Long-term Growth Building Blocks Economic Expansion + Value Proposition + Developing Capital Markets and Evolving Risks • GDP growth drives demand for debt capital to fund business investments • Refinancing needs support future supply • Proven rating accuracy and deeply experienced analysts • Mix of issuers and opportunistic issuance • Deepening participation in developing markets • Meeting customers’ evolving risk assessment demands, including Sustainable and Transition Finance, Private Credit, Digitalization of the financial sector, and Cybersecurity In addition to the factors noted above, growth in global fixed income markets in a given year is dependent on many macroeconomic and capital market factors including: Interest rates Business investment spending Corporate refinancing needs Merger and acquisition activity Issuer financial health Consumer borrowing levels Securitization activity Expansion of ratings coverage Expansion into emerging markets Rating fees paid by debt issuers account for most of the revenue of MIS.
MOODY'S 2023 10-K 21 Table of Contents Regulation MIS, certain of the Company's credit rating affiliates, and many of the issuers and/or securities that MIS and the affiliates rate, are subject to extensive regulation in the U.S. (including by state and local authorities), EU and in other countries.
MOODY'S 2024 10-K 19 Table of Contents Regulation MIS, certain of the Company's credit rating affiliates, and many of the issuers and/or securities that MIS and the affiliates rate, are subject to extensive regulation in the U.S. (including by state and local authorities), EU, U.K. and in other countries.
Illustrative examples include: Enhancements to ratings quality and product extensions Investments that extend ownership and participation in joint ventures and strategic alliances Expansion in emerging markets New products, services, content and technology capabilities, including Gen AI, to meet customer demands Selective bolt-on acquisitions that accelerate the ability to scale and grow Moody’s businesses In this era of exponential risk, we know that risks are interconnected, and organizations want a complete view of risk.
Illustrative examples include: Enhancements to ratings quality and product extensions Expansion in emerging markets New products, services, content and technology capabilities, including Gen AI, to meet customer demands Investments that extend ownership and participation in joint ventures as well as acquisitions and strategic partnerships that accelerate the ability to scale and grow Moody’s businesses In this era of exponential risk, we know that risks are interconnected, and organizations want a complete view of risk.
Public Finance Issuers Structured Finance Deals 190+ 1,000+ 370+ Rating Methodologies Infrastructure & Project Finance Issuers Sub-Sovereigns 144 47 Sovereigns Supranational Institutions MIS also generates revenue from certain non-ratings-related operations, which primarily consist of financial instruments pricing services in the Asia-Pacific region, revenue from Second Party Opinions and Net Zero Assessments and revenue from ICRA's non-ratings operations.
Public Finance Issuers Structured Finance Deals 190+ 1,000+ 380+ Rating Methodologies Infrastructure & Project Finance Issuers Sub-Sovereigns 140+ 50 Sovereigns Supranational Institutions MIS also generates revenue from certain non-ratings-related operations, which primarily consist of financial instruments pricing services in the Asia-Pacific region, revenue from Second Party Opinions and Net Zero Assessments and revenue from ICRA's non-ratings operations.
The Board also oversees Moody’s policies for assessing and managing the Company's exposure to risk, including climate-related risks such as business continuity disruption and reputational or credibility concerns stemming from incorporation of climate-related risks into the credit methodologies and credit ratings of MIS, or analysis of such risks within MA's products and services.
The Board also oversees Moody’s policies for assessing and managing the Company's exposure to risk, including climate-related risks such as business continuity disruption and reputational or credibility concerns stemming from incorporation of climate-related risks into our credit rating methodologies, or analysis of such risks within our products and services.
MOODY'S 2023 10-K 11 Table of Contents MA by the Numbers 14,800+ 6,600+ 900+ MA Customers Corporates and Professional Services Real Estate Entities 160+ 2,600+ 600+ Countries where MA customers operate Commercial Banks Educational Institutions 1,900+ 100+ Asset Managers Securities Dealers and Investment Banks 900+ 400+ Government Entities Others 800+ Insurance Companies 12 MOODY'S 2023 10-K Table of Contents Moody's Investors Service Overview MIS is a leading global provider of credit ratings, research, and risk analysis.
MOODY'S 2024 10-K 11 Table of Contents MA by the Numbers 14,800+ 6,700+ 800+ MA Customers Corporates and Professional Services Real Estate Entities 165+ 2,600+ 600+ Countries where MA customers operate Commercial Banks Educational Institutions 1,900+ 200+ Asset Managers Securities Dealers and Investment Banks 900+ 200+ Government Entities Others 900+ Insurance Companies 12 MOODY'S 2024 10-K Table of Contents Moody's Investors Service Overview MIS is a leading global provider of credit ratings, research, and risk analysis.
MOODY'S 2023 10-K 19 Table of Contents PROSPECTS FOR GROWTH Moody’s believes that the overall long-term outlook remains favorable for continued growth from the offerings of both of our reportable segments.
MOODY'S 2024 10-K 17 Table of Contents PROSPECTS FOR GROWTH Moody’s believes that the overall long-term outlook remains favorable for continued growth from the offerings of both of our reportable segments.
MIS by the Numbers ~$74 trillion 4,800+ 3,300+ Total Rated Debt Outstanding Non-Financial Corporates Financial Institutions 33,200+ 14,700+ 8,900+ Rated Organizations and Structured Deals U.S.
MIS by the Numbers $75.8+ trillion 4,800+ 3,300+ Total Rated Debt Outstanding Non-Financial Corporates Financial Institutions 33,300+ 14,400+ 8,900+ Rated Organizations and Structured Deals U.S.
The Governance & Nominating Committee oversees sustainability matters, including significant issues of corporate social and environmental responsibility, as they pertain to the Company’s business and to long-term value creation for the Company and its stockholders, and makes recommendations to the Board regarding these issues. This has helped to develop the Company’s robust ESG strategy.
The Governance & Nominating Committee oversees sustainability matters, including significant issues of corporate social and environmental responsibility, as they pertain to the Company’s business and to long-term value creation for the Company and its stockholders, and makes recommendations to the Board regarding these issues.
Mission Provide trusted insights and standards that help decision-makers act with confidence Growth Strategy Invest with intent to grow and scale Invest with intent to grow and strengthen our core business with a foundation of credibility, transparency, technology, data and analytics Invest in integrated solutions to allow customers to manage multiple risks, bringing the best of Moody's capabilities Invest to successfully scale in priority growth markets with highly differentiated products and services Investment in high growth markets Execution Priorities How we will get it done Customer first Develop our people and culture Collaborate, modernize and innovate Moody’s invests in initiatives to implement the Company’s strategy, including internally-led organic development and targeted acquisitions.
Mission Our mission is to be the leading source of relevant insights on exponential risk Growth Strategy Invest with intent to grow and scale Invest with intent to grow and strengthen our core business with a foundation of credibility, transparency, technology, data and analytics Invest in integrated solutions to allow customers to manage multiple risks, bringing the best of Moody's capabilities Invest to successfully scale in priority growth markets with highly differentiated products and services Investment in high growth markets Execution Priorities How we will get it done Customer first Develop our people and culture Collaborate, modernize and innovate Moody’s invests in initiatives to implement the Company’s strategy, including internally-led organic development and targeted acquisitions.
Inclusion Moody's believes that a diverse workforce, comprised of individuals with varied thoughts, backgrounds, and experiences, fosters an environment that makes our opinions stronger, our products more innovative, our workplace more welcoming, and improves how we relate and respond to our customers. We aim to foster a culture of true inclusion and belonging, valuing everyone's unique perspectives and contributions.
Inclusion and Belonging Moody's believes that a workforce comprised of individuals with varied thoughts, backgrounds and experiences fosters an environment that makes our opinions stronger, our products more innovative, our workplace more welcoming and improves how we relate and respond to our customers.
Additionally, HM Treasury published a consultation in March 2023 on whether regulation for providers of ESG ratings should be introduced, on the potential scope of a regulatory regime. It is unclear if and when the U.K. Government might seek to take forward such legislation.
Additionally, HM Treasury published a consultation in March 2023 on whether regulation for providers of ESG ratings should be introduced, and the potential scope of a regulatory regime. The U.K. Government has said it intends to take forward such legislation in 2025.
Specifically, Moody’s obtains licenses from third parties to use financial information (such as market and index data, financial statement data, research data, default data and security identifiers) as well as software development tools and libraries.
In addition, Moody’s licenses from third parties certain technology, data and other intellectual property rights. Specifically, Moody’s obtains licenses from third parties to use financial information (such as market and index data, financial statement data, research data, default data and security identifiers) as well as software development tools and libraries.
In December 2022, the EU adopted DORA, which will apply from early 2025. As a credit rating agency, MIS is in scope of DORA, and accordingly, is required to undertake certain steps to ensure that its oversight and risk management of its information technology, including any functions outsourced to third-parties that provide information communication technologies, is resilient.
As a credit rating agency, MIS is in scope of DORA, and accordingly, is required to undertake certain steps to ensure that its oversight and risk management of its information technology, including any functions outsourced to third-parties that provide information communication technologies, is resilient.
Earlier in his career, he was also responsible for the research strategy for the ratings businesses and before that led Corporate Finance for the EMEA Region, European Corporates and the EMEA leveraged finance business. 24 MOODY'S 2023 10-K Table of Contents
Earlier in his career, he was also responsible for the research strategy for the ratings businesses and before that led Corporate Finance for the EMEA Region, European Corporates and the EMEA leveraged finance business.
Intellectual Property Moody’s and its affiliates own and control a variety of intellectual property, including but not limited to: Proprietary information Publications Databases Trademarks Software as a service and other software tools and applications Domain names Research Models and methodologies Other proprietary materials that, in the aggregate, are of material importance to Moody’s business Management of Moody’s believes that the trademarks and related corporate names, marks and logos relating to its businesses, including those containing the term “Moody’s”, are of material importance to the Company. 22 MOODY'S 2023 10-K Table of Contents The Company, primarily through MA and its affiliates, licenses certain of its databases, SaaS and other software applications, credit risk models, assessments, research and other publications and services that contain intellectual property to its customers.
Intellectual Property Moody’s and its affiliates own and control a variety of intellectual property, including but not limited to: Proprietary information Publications Databases Trademarks and Patents SaaS and other software tools and applications Domain names Research Models and methodologies Other proprietary materials that, in the aggregate, are of material importance to Moody’s business 20 MOODY'S 2024 10-K Table of Contents Management of Moody’s believes that the trademarks and related corporate names, marks and logos relating to its businesses, including those containing the term “Moody’s”, are of material importance to the Company.
Sullivan has served as the Company’s Chief Accounting Officer and Corporate Controller since December 2018 and has served as the Interim Chief Financial Offer since September 2023. Prior to joining the Company, Ms. Sullivan served in several roles at Bank of America from 2011 to 2018, where her last position held was Managing Director and Global Banking Controller.
She served as the Interim Chief Financial Offer from September 2023 to April 2024. Prior to joining the Company, Ms. Sullivan served in several roles at Bank of America from 2011 to 2018, where her last position held was Managing Director and Global Banking Controller. Prior to that role, Ms.
West served as Managing Director—Head of Global Structured Finance from February 2014 to May 2016 and Managing Director—Head of Global Corporate Finance from January 2010 to January 2014.
West served as Managing Director—Head of MIS Ratings and Research from June 2016 to October 2019. Previously, Mr. West served as Managing Director—Head of Global Structured Finance from February 2014 to May 2016 and Managing Director—Head of Global Corporate Finance from January 2010 to January 2014.
CLIMATE CHANGE Climate change is a defining issue of our time, and while Moody’s has a limited direct environmental impact, we do nonetheless have an important role to play in demonstrating proactive corporate responsibility and best practices when it comes to climate change mitigation.
CLIMATE CHANGE Climate change is a major challenge that demands action from all of us. While Moody’s has a limited direct environmental impact, we do have an important role to play in demonstrating proactive corporate responsibility and best practices when it comes to climate change mitigation.
MIS competes with other CRAs and with investment banks and brokerage firms that offer credit opinions and research. Many users of MIS’s ratings also have in-house credit research capabilities.
MA's main competitors within D&I are providers of commercial and financial data. MIS competes with other CRAs and with investment banks and brokerage firms that offer credit opinions and research. Many users of MIS’s ratings also have in-house credit research capabilities.
The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment. MOODY'S 2023 10-K 13 Table of Contents Sustainability Moody’s manages its business with the goal of delivering value to all of its stakeholders, including its customers, employees, business partners, local communities and stockholders.
The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment. MOODY'S 2024 10-K 13 Table of Contents Sustainability Moody's aims to deliver value to all stakeholders, including customers, employees, partners, communities, and stockholders. We consider sustainability in our operations, products, and services.
Competition MA competes broadly in the financial information and enterprise risk software industries against various diversified competitors. MA’s main competitors within DS are providers of software and analytic solutions. In R&I, MA faces competition from providers of economic data, financial research and analysis. MA's main competitors within D&I are providers of commercial and financial data.
This strategic expansion has solidified our domestic rating agency's position, enhancing its capacity and reach. Competition MA competes broadly in the financial information and enterprise risk software industries against various diversified competitors. MA’s main competitors within DS are providers of software and analytic solutions. In R&I, MA faces competition from providers of economic data, financial research and analysis.
In the U.K., MIS U.K. is registered with and regulated by the FCA. In March 2023, the FCA initiated a review of competition in the markets for certain types of wholesale market data. Credit rating data is included as one element of the FCA’s review.
In the U.K., MIS U.K. is registered with and regulated by the FCA. In March 2023, the FCA initiated a review of competition in the markets for certain types of wholesale market data, including credit ratings data. The review concluded at the end of February 2024.
This periodic survey helps Moody's management understand our employees’ level of engagement in critical areas, which include, but are not limited to: company strategy; opportunities for employee development; and work/life balance. Managers are accountable for identifying opportunity areas and taking targeted actions based on survey results.
This periodic survey helps Moody's management understand our employees' level of engagement in critical areas, which include, but are not limited to, purpose, leadership, managerial effectiveness, connection, enablement and empowerment and well-being. Managers are accountable for identifying opportunity areas and taking targeted actions based on survey results.
The Board oversees sustainability matters via the Audit, Governance & Nominating, and Compensation & Human Resources Committees, as part of its oversight of management and the Company’s overall strategy.
The Board oversees sustainability matters via the Audit, Governance & Nominating, and Compensation & Human Resources Committees, as part of its oversight of management and the Company’s overall strategy. The Audit Committee oversees financial, risk and other disclosures made in the Company’s annual and quarterly reports related to sustainability.
Prior to that role, Ms. Sullivan supported the Global Wealth & Investment Management business from 2015 to 2017 in a variety of positions, including Controller. Ms. Sullivan, a CPA, previously held various senior positions at several banks and a major accounting firm. Stephen Tulenko, 56 President, Moody’s Analytics Mr. Tulenko has served as President of Moody’s Analytics since November 2019.
Sullivan supported the Global Wealth & Investment Management business from 2015 to 2017 in a variety of positions, including Controller. Ms. Sullivan, a CPA, previously held various senior positions at several banks and a major accounting firm. 22 MOODY'S 2024 10-K Table of Contents Name, Age, Position and Biographical Data Stephen Tulenko, 57 President, Moody’s Analytics Mr.
Mr. Tulenko served as Executive Director of ERS from 2013 to October 2019 and as Executive Director of Global Sales, Customer Service and Marketing from 2008 to 2013. Prior to the formation of Moody’s Analytics, he held various sales, product development and product strategy roles at Moody’s Investors Service, Inc. Mr. Tulenko joined Moody’s in 1990.
Prior to the formation of Moody’s Analytics, he held various sales, product development and product strategy roles at Moody’s Investors Service, Inc. Mr. Tulenko joined Moody’s in 1990. Michael West, 56 President, Moody’s Investors Service Mr. West has served as President of Moody’s Investors Service, Inc. since November 2019. Mr.
Our governance model also include three Regional Inclusion Councils tasked with overseeing the implementation and progression of the inclusion strategy within their respective regions. Each council is composed by the BRG regional executives sponsors and also meet on a quarterly basis.
The Global Inclusion Council, chaired by our CEO and composed of senior leaders, is charged with oversight of our global inclusion strategy and its progress. The members of the council meet quarterly. Our governance model also includes three Regional Inclusion Councils tasked with overseeing the inclusion strategy within their respective regions. Each council meets on a quarterly basis.
Our decarbonization plan outlines tangible strategies for realizing its climate ambitions, including the procurement of 100% of renewable electricity in the Company’s office spaces and optimizing efficiencies in its operations through its hybrid work program. The costs associated with the implementation of the decarbonization plan are not expected to be material.
As such, the Company is taking steps to reduce emissions across its operations and value chain in accordance with its decarbonization strategy. Our decarbonization plan outlines tangible strategies for realizing our climate ambitions, including the procurement of 100% of renewable electricity in the Company’s office spaces and optimizing efficiencies in its operations through its hybrid work program.
Our operating model includes 11 active BRGs which represent 53 chapters and are open to all Moody's employees, with more than 3,800 employees participating globally as of December 31, 2023. Data The charts below present additional information regarding the composition of the Company's workforce as of December 31, 2023.
Our operating model includes 11 active BRGs which represent 48 chapters. These groups are open to all Moody's employees, with more than 4,800 employees participating globally as of December 31, 2024.
Steele was a corporate lawyer at Wilson Sonsini Goodrich & Rosati, and also held senior legal positions at several firms in financial technology, software and venture capital. MOODY'S 2023 10-K 23 Table of Contents Name, Age, Position and Biographical Data Caroline Sullivan, 55 Interim Chief Financial Officer, Chief Accounting Officer and Corporate Controller Ms.
Steele was a corporate lawyer at Wilson Sonsini Goodrich & Rosati, and also held senior legal positions at several firms in financial technology, software and venture capital. Caroline Sullivan, 56 Chief Accounting Officer and Corporate Controller Ms. Sullivan has served as the Company’s Chief Accounting Officer and Corporate Controller since December 2018.
Finally, the Compensation & Human Resources Committee oversees inclusion of sustainability-related performance goals for determining compensation of all senior executives. This oversight has resulted in the Company more fully integrating sustainability-related performance metrics into the strategic & operational compensation metric of all senior executives.
Finally, the Compensation & Human Resources Committee oversees inclusion of sustainability-related performance goals for determining compensation of all senior executives.
The feedback received through the BES is used as a vital input into making decisions to improve employee experience and retention.
The feedback received through the BES is used as a vital input into making decisions to improve employee experience and retention. As we strive to make Moody’s a place people want to come and stay, management also carefully monitors global employee turnover rates.
As of December 31, 2023 and 2022, the number of Moody’s employees was as follows: December 31, Change 2023 2022 % MA U.S. 2,995 2,789 7 % Non-U.S. 4,858 4,333 12 % Total 7,853 7,122 10 % MIS U.S. 1,490 1,538 (3) % Non-U.S. 3,855 3,981 (3) % Total 5,345 5,519 (3) % MSS U.S. 744 741 — % Non-U.S. 1,209 1,044 16 % Total 1,953 1,785 9 % Total MCO U.S. 5,229 5,068 3 % Non-U.S. 9,922 9,358 6 % Total 15,151 14,426 5 % – MA’s employee population primarily consists of software engineers, product managers and strategists, data and operations analysts, advisory and implementation teams and economists, as well as sales, business development, and sales support professionals. – The MIS employee population primarily consists of credit analysts, data and operations analysts, credit strategy and methodology professionals, software engineers, sales and sales operations, and international strategy teams. – The MSS employee population primarily consists of information technology professionals and other professional staff such as finance, human resources, compliance, and legal that support both MA and MIS.
MOODY'S 2024 10-K 15 Table of Contents Workforce Overview As of December 31, 2024 and 2023, the number of Moody’s employees was as follows: December 31, Change 2024 2023 (1) % MA U.S. 2,989 2,992 — % Non-U.S. 5,156 4,872 6 % Total 8,145 7,864 4 % MIS U.S. 1,571 1,490 5 % Non-U.S. 4,186 3,870 8 % Total 5,757 5,360 7 % MSS U.S. 696 749 (7) % Non-U.S. 1,240 1,187 4 % Total 1,936 1,936 — % Total MCO U.S. 5,256 5,231 — % Non-U.S. 10,582 9,929 7 % Total 15,838 15,160 4 % (1) Certain reclassifications have been made to 2023 amounts to reflect certain departmental reorganizations and M&A integrations – MA’s employee population primarily consists of software engineers, product managers and strategists, data and operations analysts, advisory and implementation teams and economists, as well as sales, business development, and sales support professionals. – The MIS employee population primarily consists of credit analysts, data and operations analysts, credit strategy and methodology professionals, software engineers, sales and sales operations, and international strategy teams. – The MSS employee population primarily consists of information technology professionals and other professional staff such as finance, human resources, compliance, and legal that support both MA and MIS.
Moody's We provide tools that enable Banks, Insurers, Investors, Corporations and Governments to... What do we do? Issue, Originate, Select, Underwrite Identify, Measure, Monitor & Manage Risk Verify, Comply, Plan & Report Leveraging our set of data, analytics, & domain expertise across... How do we do this?
What do we do? Issue, Originate, Select, Underwrite Identify, Measure, Monitor & Manage Risk Verify, Comply, Plan & Report Leveraging an unrivaled set of data, analytics, & domain expertise across... How do we do this? Credit Companies Properties Securities People Economies ESG Climate Moody’s has two reportable segments: MA and MIS.
Provider of financial intelligence and analytical tools supporting customers’ growth, efficiency and risk management objectives Independent provider of credit rating opinions and related information for over 100 years Financial information and operating results of these segments, including revenue, expenses and Adjusted Operating Income, are included in Part II, Item 8.
Financial information and operating results of these segments, including revenue, expenses and Adjusted Operating Income, are included in Part II, Item 8.
Within MIS, we remain firmly committed to ratings quality, timely and insightful research, and engagement with issuers and investors. During the last year, we further expanded our domestic ratings footprint into new domestic markets, with investments in new affiliates in Costa Rica and Vietnam. Additionally, the prominence of our Moody’s Local domestic rating business has grown significantly.
Within MIS, we remain firmly committed to ratings quality, timely and insightful research, and engagement with issuers and investors. In the past year, we have enhanced our footprint in domestic markets by increasing our majority share in the GCR Africa affiliate and expanding in Latin American markets through Moody's Local domestic rating business.
Beyond delivering health, welfare, retirement benefits and paid vacation and sick days, Moody’s extends other benefits to support its employees and their families, such as parental leave and educational support. The Company also promotes flexible work arrangements, which support the Company’s efforts to create a work atmosphere in which people feel valued and inspired to give their best.
The Company also promotes flexible work arrangements, which support the Company's efforts to create a work atmosphere in which people feel valued and inspired to give their best. The Company has implemented a "PurposeFirst" framework, which fosters purpose-driven decisions relating to how and where Moody's teams work.
The Company is taking steps to integrate these capabilities into existing offerings to provide its analysts and researchers with streamlined access to consistent and high-quality climate insights. 18 MOODY'S 2023 10-K Table of Contents MOODY’S STRATEGY Moody’s is a global integrated risk assessment firm that empowers organizations to anticipate, adapt and thrive in a new era of exponential risk.
Additionally, we have launched a Net Zero Assessment framework to provide an independent and comparable evaluation of the strength of an entity’s carbon transition plan. 16 MOODY'S 2024 10-K Table of Contents MOODY’S STRATEGY Moody’s is a global integrated risk assessment firm that empowers organizations to anticipate, adapt and thrive in a new era of exponential risk.
Michael West, 55 President, Moody’s Investors Service Mr. West has served as President of Moody’s Investors Service, Inc. since November 2019. Mr. West served as Managing Director—Head of MIS Ratings and Research from June 2016 to October 2019. Previously, Mr.
Tulenko has served as President of Moody’s Analytics since November 2019. Mr. Tulenko served as Executive Director of Moody's former Enterprise Risk Solutions LOB from 2013 to October 2019 and as Executive Director of Global Sales, Customer Service and Marketing from 2008 to 2013.
A number of training programs are available, including leadership development, professional skills development and technical skills. The Company measures employee engagement via multiple channels, including a BES for employees to provide anonymous and candid feedback to management.
Moody's Employee Experience function conducts listening sessions with our employees and creates targeted plans to act on the feedback provided. We measure employee engagement via multiple channels, including the BES for employees to provide anonymous and candid feedback to management.
By providing a functional framework to guide how our inclusion team, councils, sponsors, BRGs and committees work together, the OGM focuses our collective efforts to advance our strategic priorities.
We are committed to cultivating a culture where every individual feels a sense of belonging and has an equal opportunity to succeed. Our Inclusion Operating and Governance Model turns our inclusion strategy into reality by providing a functional framework to guide how our People team, councils, sponsors, BRGs and committees work together.
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THE COMPANY Company Overview Moody’s is a global integrated risk assessment firm that empowers organizations to anticipate, adapt and thrive in a new era of exponential risk. Our data, analytical solutions and insights help decision-makers identify opportunities and manage the risks of doing business with others. Moody's is empowering organizations to make better decisions.
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THE COMPANY Company Overview In a world shaped by increasingly interconnected risks, Moody's data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities.
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Credit Companies Properties Securities People Economies ESG Climate Moody’s has two reportable segments: MA and MIS.
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With a rich history of experience in global markets and a diverse workforce of approximately 16,000 across more than 40 countries, Moody's gives customers the comprehensive perspective needed to act with confidence and thrive. Moody's is helping customers accelerate value creation in an era of exponential risk. Moody's We provide tools that enable Banks, Insurers, Investors, Corporations and Governments to...
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As part of this effort, Moody’s advances its commitment to sustainability by considering ESG factors in its operations, value chain, products and services. It uses its expertise and assets to make a positive difference through technology tools, research and analytical services that help other organizations and the investor community better understand the links between sustainability considerations and the global markets.
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Moody's Analytics Moody's Investors Service MA provides data, intelligence and analytical tools to help business and financial leaders make confident decisions. For more than 115 years, MIS has been a leading provider of credit ratings, research, and risk analysis helping businesses, governments, and other entities around the globe.
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Moody’s efforts to promote sustainability-related thought leadership, assessments and data to market participants involve adhering to globally recognized standards including the GRI, SASB and TCFD recommendations.
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We use our expertise to make a positive impact, helping others understand the link between sustainability and global markets.
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The Audit Committee oversees financial, risk and other disclosures made in the Company’s annual and quarterly reports related to sustainability and has overseen the expanded voluntary disclosures the Company has made in its periodic filings.
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The Board maintains its collective knowledge of sustainability topics through ongoing education, such as regular presentations from management.
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Three Pillars of Moody's Sustainability Strategy Better Business Better Lives Better Solutions For Moody's operations and value chain For Moody's people and communities For market transformation Strive to embed responsible, sustainable decision-making into our operations and value chain. Aim to foster a nurturing and inclusive culture across Moody's people and communities.
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Three Pillars of Moody's Sustainability Strategy Our Actions Our Influence Our Support the decisions and actions we can take related to impacts under our direct control the actions that we can request from entities providing us with products and services the steps we take to support or enable direct action by other organizations or communities 14 MOODY'S 2024 10-K Table of Contents HUMAN CAPITAL Our employees are vital to Moody’s continued success, and we seek to create an environment that attracts, develops and sustains a highly skilled, performance-oriented and engaged workforce.
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Deliver trusted perspectives that inform a clear and holistic understanding of ESG risk. 14 MOODY'S 2023 10-K Table of Contents HUMAN CAPITAL Moody's believes that a workforce representing an array of backgrounds and experiences helps create an environment that maximizes every employee’s contribution, widens the leadership pipeline and enhances our work, including the quality of our opinions, products and services.
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Our approach is oriented around the following pillars: – providing market-competitive compensation, benefits and wellness programs as part of our Total Rewards program; – implementing a robust talent management, employee engagement and retention strategy; and – fostering an inclusive environment where all employees have a sense of belonging and are given the opportunity to perform their best.
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As a global provider of integrated perspectives on risk, attracting, supporting and retaining skilled talent is essential to the Company’s success. Moody’s addresses these goals by: – championing inclusion among employees; – providing market-competitive compensation, benefits and wellness programs; and – advancing employee engagement, including supporting employee learning, development and skills enhancement.
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Total Rewards Moody's Total Rewards programs are designed to attract and maintain a high-performing, engaged and motivated global workforce. The Company's compensation packages include market-competitive salaries, performance-based annual bonuses, and equity grants aligned to our long-term performance for certain employees. The Company's industry leading benefits programs offer comprehensive resources to support physical, mental and financial well-being.
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We believe diversity and equity are essential to build a workplace where inclusion thrives. That strategy will guide us as we seek to ensure equal opportunities in all aspects of employment.
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We invest in AI powered technologies in order to provide our employees with a world-class experience accessing and managing their benefits. We continuously evaluate our market benchmarks and employee feedback so that our benefits are competitive and support the attraction of the best talent.
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Focus Areas Our current strategy is rooted in the following five focus areas intended to drive meaningful change: – A Broader, More Global Perspective on Diversity We want every one of our employees, everywhere, to be equally involved and supported in all areas of our workplace.
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For example, in recent years we implemented a global paid parental leave policy to give parents time off to care for and bond with a new child and updated our tuition reimbursement program.
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Our goal is to position diversity in a way that works for everyone—to be broader and more holistic.
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Talent Management, Employee Engagement and Retention Moody’s believes that our long-term success depends on our ability to attract, develop and retain a high-performing workforce. Our goal is to create an environment where colleagues can thrive personally and professionally and can maximize their potential.
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As a global company, we will seek to understand how different parts of the world view diversity differently. – BRGs as Cultural Ambassadors We recognize the significant contributions of our BRGs to our organization—they are open to all employees and foster a sense of unity and community, creating an environment where employees feel a strong sense of belonging and are encouraged to be their most authentic selves at work.
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Our culture is one of continuous learning, which we believe is crucial for colleagues to thrive as part of our organization and to feel a sense of accomplishment and purpose, and our leaders are key in reinforcing this at Moody’s.
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BRGs are networks for purposeful engagement and cohesive organization. We want to continue to empower our BRGs, so they can flourish. MOODY'S 2023 10-K 15 Table of Contents – Pay Equity and Inclusive Benefits We are committed to paying all of our employees equitably and fairly and to providing them with extensive and inclusive benefits programs.
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Moody's talent strategy helps us create integrated, cohesive talent activities that support the growth and success of our employees and the business. This strategy informs all of our talent programs, guiding our efforts to attract, develop and retain top talent.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition to the risks addressed elsewhere in this section, operations abroad expose Moody’s to a number of legal, economic and regulatory risks such as: – economic and geopolitical events and market conditions, such as the Russia-Ukraine military conflict and the military conflict in Israel and surrounding areas, including the effect of these events and conditions on customers, customer retention and demands for our products and services; – exposure to exchange rate movements between foreign currencies and USD; – restrictions on the ability to convert local currency into USD and the costs, including the tax impact, of repatriating cash held by entities outside the U.S.; – U.S. laws affecting overseas operations, including domestic and foreign export and import restrictions, tariffs and other trade barriers and restrictions, such as those related to the U.S.’s relationship with China and embargoes and sanctions laws with respect to Russia, including the Russia-Ukraine military conflict; – differing and potentially conflicting legal or civil liability, compliance and regulatory standards; – current and future regulations relating to the imposition of mandatory rotation requirements on CRAs hired by issuers of securities; – uncertain, evolving and new laws and regulations, including those applicable to the financial services industries, such as the European Union’s upcoming implementation of DORA in January 2025, and to the protection of intellectual property and to the emergence of LLMs in the context of Gen AI and other technologies, such as the EU AI Act, including the effect of these laws and regulations on our customers and on the products and services that we offer; – uncertainty regarding the future relationship and increasing tensions between the U.S. and China, which may result in further restrictions or actions by the U.S. government with respect to doing business in China and/or by the Chinese government with respect to business conducted by foreign entities in China; – the possibility of nationalization, expropriation, price controls and other restrictive governmental actions; – competition with CRAs that have greater familiarity, longer operating histories and/or support from local governments or other institutions; – uncertainties in obtaining data and creating products and services relevant to particular geographic markets; – reduced protection for intellectual property rights; MOODY'S 2023 10-K 29 Table of Contents – longer payment cycles and possible problems in collecting receivables; – differing accounting principles and standards; – difficulties in staffing and managing foreign operations; – difficulties and delays in translating documentation into foreign languages; – potentially adverse tax consequences; and – complexities of compliance with employment laws, various proposed and enacted data privacy laws, and cybersecurity rules in numerous jurisdictions.
Biggest changeSuch conflicts could eventually affect the ability of entities to adhere to applicable laws or continue to operate in certain jurisdictions; – differing and potentially conflicting legal or civil liability, compliance and regulatory standards; – current and future regulations relating to the imposition of mandatory rotation requirements on CRAs hired by issuers of securities; – uncertain, evolving and new laws and regulations, including those applicable to the financial services industries, such as the EU’s implementation of DORA in January 2025, and to the protection of intellectual property and to the emergence of LLMs in the context of Gen AI and other technologies, such as the EU AI Act, including the effect of these laws and regulations on our customers and on the products and services that we offer; – uncertainty regarding the future relationship and increasing tensions between the U.S. and China, which may result in further restrictions or actions by the U.S. government with respect to doing business in China and/or by the Chinese government with respect to business conducted by foreign entities in China; – the possibility of nationalization, expropriation, price controls and other restrictive governmental actions; – competition with CRAs that have greater familiarity, longer operating histories and/or support from local governments or other institutions; – uncertainties in obtaining reliable data and creating products and services relevant to particular geographic markets; – reduced protection for intellectual property rights; – longer payment cycles and possible problems in collecting receivables; – differing accounting principles and standards; – difficulties in staffing and managing foreign operations; – difficulties and delays in translating documentation into foreign languages; – potentially adverse tax consequences; and – complexities of compliance with employment laws, various proposed and enacted data privacy laws, and cybersecurity rules in numerous jurisdictions.
Additional procedural and substantive requirements include conditions for the issuance of credit ratings, rules regarding the organization of CRAs, restrictions on activities deemed to create a conflict of interest, including requirements that fees be based on costs and non-discriminatory, and special requirements for credit ratings of structured finance instruments. – In Hong Kong, applicable rules include liability for the intentional or negligent dissemination of false and misleading information and procedural requirements for the notification of certain matters to regulators.
Additional procedural and substantive requirements include conditions for the issuance of credit ratings, rules regarding the organization of CRAs, restrictions on activities deemed to create a conflict of interest, including requirements that fees be based on costs and non-discriminatory, special requirements for credit ratings of structured finance instruments. – In Hong Kong, applicable rules include liability for the intentional or negligent dissemination of false and misleading information and procedural requirements for the notification of certain matters to regulators.
Competitors may develop quantitative methodologies or related services, including services based on LLMs and Gen AI, for assessing credit risk that customers and market participants may deem preferable, more cost-effective or more valuable than the credit risk assessment methods currently employed by Moody’s, or may position, price or market their products in manners that differ from those utilized by Moody’s.
Competitors may develop quantitative methodologies or related services, including services based on Gen AI, for assessing credit risk that customers and market participants may deem preferable, more cost-effective or more valuable than the credit risk assessment methods currently employed by Moody’s, or may position, price or market their products in manners that differ from those utilized by Moody’s.
U.S. banking regulators, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, as well as many state agencies, have issued guidance to insured depository institutions and other providers of financial services on assessing and managing risks associated with third-party relationships, which include all business arrangements between a financial services provider and another entity, by contract or otherwise, and generally requires banks and financial services providers to exercise comprehensive oversight throughout each phase of a bank or financial service provider’s business arrangement with third-party service providers, and instructs banks and financial service providers to adopt risk management processes commensurate with the level of risk and complexity of their third-party relationships.
For example: – U.S. banking regulators, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, as well as many state agencies, have issued guidance to insured depository institutions and other providers of financial services on assessing and managing risks associated with third-party relationships, which include all business arrangements between a financial services provider and another entity, by contract or otherwise, and generally requires banks and financial services providers to exercise comprehensive oversight throughout each phase of a bank or financial service provider’s business arrangement with third-party service providers, and instructs banks and financial service providers to adopt risk management processes commensurate with the level of risk and complexity of their third-party relationships.
Each of these developments increase the costs and legal risk associated with the issuance of credit ratings and can have a material adverse effect on Moody’s operations, profitability and competitiveness, the demand for credit ratings and the manner in which such ratings are utilized.
Each of these developments increase the costs and legal risk associated with the issuance of credit ratings and can have a material adverse effect on Moody’s operations, profitability and competitiveness, the demand for credit ratings and the manner in which such ratings are utilized. Moody's Analytics.
Conditions that reduce issuers’ ability or willingness to issue debt securities, such as market volatility, declining growth, currency devaluations, changes in laws (including tax-related laws) or other adverse economic trends, reduce the number and dollar-equivalent volume of debt issuances for which MIS provides ratings services and thereby adversely affect the fees Moody’s earns in its ratings business.
Conditions that reduce issuers’ ability or willingness to issue debt securities, such as interest rate and market volatility, declining growth, currency devaluations, changes in laws (including tax-related laws) or other adverse economic trends, reduce the number and dollar-equivalent volume of debt issuances for which MIS provides ratings services and thereby adversely affect the fees Moody’s earns in its ratings business.
During 2023, multiple foreign jurisdictions in which the Company operates have enacted legislation to adopt a minimum tax rate described in the GloBE or Pillar Two, tax model rules issued by the OECD. A minimum ETR of 15% would apply to multinational companies with consolidated revenue above €750 million with an effective date beginning in 2024.
During 2023, multiple foreign jurisdictions in which the Company operates have enacted legislation to adopt a minimum tax rate described in the GloBE or Pillar II, tax model rules issued by the OECD. A minimum ETR of 15% would apply to multinational companies with consolidated revenue above €750 million with an effective date beginning in 2024.
Moody’s efforts to secure and plan for potential disruptions of its major operating systems may not be successful. The Company relies on third-party providers, including, increasingly, cloud-based service providers, to provide certain essential services. While the Company believes that such providers are reliable, the Company has limited control over the performance of such providers.
Moody’s efforts to secure and plan for potential disruptions of its major operating systems may not be successful. The Company also relies on third-party providers, including, increasingly, cloud-based service providers, to provide certain essential services. While the Company believes that such providers are generally reliable, the Company has limited control over the performance of such providers.
To date, such attacks have not resulted in a material adverse impact to Moody’s business operations, but there can be no guarantee the Company will not experience such an impact in the future. If any of these risks materialize, they could have a material adverse effect on the Company’s business, financial condition or results of operations. ITEM 1B.
To date, such attacks have not resulted in a material adverse impact to Moody’s business operations, but there can be no guarantee the Company will not experience such an impact in the future. If any of these risks materialize, they could have a material adverse effect on the Company’s business, financial condition or results of operations.
There is a risk that even when the Company invests significant resources in attempting to attract, train and retain qualified personnel, it will not succeed in its efforts, and its business could be harmed. Further, employee expectations in areas such as ESG have been rapidly evolving and increasing.
There is a risk that even when the Company invests significant resources in attempting to attract, train and retain qualified personnel, it will not succeed in its efforts, and its business could be harmed. Further, employee expectations in areas such as ESG have been evolving.
While the Pillar Two minimum tax requirement is not currently anticipated to have a material impact on the Company’s results of operations or financial position, management is evaluating and will continue to monitor the potential impact of the Pillar Two global minimum tax proposals on our consolidated financial statements and related disclosures. B.
While the Pillar II minimum tax requirement is not currently anticipated to have a material impact on the Company’s results of operations or financial position, management is evaluating and will continue to monitor the potential impact of the Pillar II global minimum tax proposals on our consolidated financial statements and related disclosures. B.
Additionally, as litigation or the process to resolve pending matters progresses, Moody’s will continue to review the latest information available and may change its accounting estimates, which could require Moody’s to record or increase liabilities in the consolidated financial statements in future periods.
Additionally, as litigation or the process to resolve pending matters progress, Moody’s will continue to review the latest information available and may change its accounting estimates, which could require Moody’s to record or increase liabilities in the consolidated financial statements in future periods.
Furthermore, we could be criticized for the timing, scope or nature of these initiatives, goals or commitments, or for any changes to them. To the extent that our required and voluntary disclosures about such ESG matters increase, we could be criticized for the accuracy, sufficiency or completeness of such disclosures.
Furthermore, we could be criticized for the timing, scope or nature of these initiatives, goals or commitments, or for any changes to them. To the extent that our required and voluntary disclosures about such sustainability matters increase, we could be criticized for the accuracy, sufficiency or completeness of such disclosures.
Cyber-attacks targeting Moody’s or Moody’s vendors’ technology and systems, whether from circumvention of security systems, denial-of-service attacks, ransomware, malware, hacking, social engineering or "phishing" attacks, computer viruses, employee or insider threats, malfeasance, supply chain attacks, physical breaches, payment fraud or other cyber-attacks some of which may be carried out by state-sponsored actors, may result in unauthorized access, exfiltration, manipulation or corruption of sensitive data, material interruptions or malfunctions in the Company’s or such vendors’ web sites or systems, applications, data processing, or disruption of other business operations.
Cyber-attacks targeting Moody’s or Moody’s vendors’ technology and systems, whether from circumvention of security systems, denial-of-service attacks, ransomware, malware, hacking, social engineering or "phishing" attacks, deepfake attacks, computer viruses, employee or insider threats, malfeasance, supply chain attacks, physical breaches, vendor email compromise, payment fraud or other cyber-attacks some of which may be carried out by state-sponsored actors, may result in unauthorized access, exfiltration, manipulation or corruption of sensitive data, material interruptions or malfunctions in the Company’s or such vendors’ web sites or systems, applications, data processing, or disruption of other business operations.
Moody’s competitors include both established companies with significant financial resources, brand recognition, market experience and technological expertise, and smaller companies which may be better poised to quickly adopt new or emerging technologies or respond to customer requirements.
Moody’s competitors include both established companies with significant financial resources, brand recognition, market experience and technological expertise, and smaller companies which may be more agile and better poised to quickly adopt new or emerging technologies or respond to customer requirements.
Legal proceedings and regulatory inquiries and investigations impose additional expenses on the Company and require the attention of senior management to an extent that may significantly reduce their ability to devote time to addressing other business issues, and any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions.
Legal proceedings and regulatory inquiries and investigations impose additional expenses on the Company and require the attention of senior management to an extent that may significantly reduce their ability to devote time to addressing other business issues, and any of these proceedings, investigations or inquiries (including market studies) could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions.
The Company’s ability to comply with applicable laws and regulations, including anti-corruption, antitrust and securities trading laws, the Reform Act, the Dodd-Frank Act and regulations thereunder, is largely dependent on its establishment and maintenance of compliance, review and reporting systems, as well as its ability to attract and retain qualified compliance and risk management personnel.
The Company’s ability to comply with applicable laws and regulations, including anti-corruption, antitrust, economic and trade sanctions, and securities trading laws, the Reform Act, the Dodd-Frank Act and regulations thereunder, is largely dependent on its establishment and maintenance of compliance, review and reporting systems, as well as its ability to attract and retain qualified compliance and risk management personnel.
The markets for credit ratings, research, credit risk management services, business intelligence and analytical services are highly competitive and characterized by rapid technological change, including change based on our Gen AI offerings, changes in customer and investor demands, and evolving regulatory requirements, industry standards and market preferences.
The markets for credit ratings, research, credit risk management services, business intelligence and analytical services are highly competitive and characterized by rapid technological change, including change based on our Gen AI offerings, disruption by the Gen AI offerings of others, changes in customer and investor demands, and evolving regulatory requirements, industry standards and market preferences.
Additionally, Moody’s is subject to complex U.S., foreign and other local laws and regulations that are applicable to its operations abroad, such as laws and regulations governing economic and trade sanctions, tariffs, embargoes, and anticorruption including the Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other similar local laws.
Additionally, Moody’s is subject to complex U.S., foreign and other local laws and regulations that are applicable to its operations abroad, such as laws and regulations governing economic and trade sanctions, tariffs, embargoes, and anti-corruption including the Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other similar local laws.
It is also possible that Moody’s competitors or other entities could obtain patents related to the types of products and services that Moody’s offers, and attempt to require Moody’s to stop developing or marketing the products or services, to modify or redesign the products or services to avoid infringing, or to obtain licenses from the holders of the patents in order to continue developing and marketing the products and services.
It is also possible that Moody’s competitors or other entities could obtain patents or other intellectual property rights related to the types of products and services that Moody’s offers, and attempt to require Moody’s to stop developing or marketing the products or services, to modify or redesign the products or services to avoid infringing, or to obtain licenses from the holders of the intellectual property in order to continue developing and marketing the products and services.
Moody’s may not have adequate insurance or reserves to cover these risks, and the existence and magnitude of these risks often remains unknown for substantial periods of time.
Moody’s may not have adequate insurance or reserves to cover these risks, and the existence and magnitude of these risks often remain unknown for substantial periods of time.
These regulations could: – affect the need for debt securities to be rated; – expand supervisory remits to include credit ratings issued outside the home jurisdiction and used for regulatory purposes; – increase the level of competition in the market for credit ratings, including the distribution of credit ratings; – establish criteria for credit ratings or limit the entities authorized to provide credit ratings; – restrict the collection, use, accuracy, correction and sharing of personal information by CRAs; or – regulate pricing (for example to require fees that are based on costs and are non-discriminatory) on products and services provided by MA such as those products that incorporate credit ratings and research originated by MIS.
These regulations could: – affect the need for debt securities to be rated; – expand supervisory remits to include credit ratings issued outside the home jurisdiction; – increase the level of competition for credit ratings, including the distribution of credit ratings; – establish criteria for credit ratings or limit the entities authorized to provide credit ratings; – restrict the collection, use, accuracy, correction and sharing of information by CRAs; or – regulate pricing (for example to require fees that are based on costs and are non-discriminatory) on products and services provided by MA such as those products that incorporate credit ratings and research originated by MIS.
In addition to the effects of general economic conditions, including inflation and related monetary policy actions in response to inflation, changes in international conditions, including the impact of ongoing or new developments in the Russia-Ukraine military conflict and the military conflict in Israel and surrounding areas, and resulting global disruptions on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the global economic climate may give rise to or amplify many of these risks discussed below.
In addition to the effects of general economic conditions, including inflation and related monetary policy actions in response to inflation, changes in international conditions, including the impact of ongoing or new developments in the Russia-Ukraine military conflict and the military conflict in the Middle East, and resulting global disruptions on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the global economic climate may give rise to or amplify many of these risks discussed below.
The ability to develop and successfully launch and maintain innovative products, technologies and services that anticipate customers’ and investors’ changing requirements and utilize emerging technological trends in a timely and cost-effective manner is a key factor in maintaining market share.
The ability to develop and successfully launch and maintain innovative products, technologies and services that anticipate customers’ and investors’ changing requirements and utilize emerging technological trends in a timely and cost-effective manner is a key factor in maintaining a competitive market position.
Parties who invest in securities rated by MIS have pursued claims against MIS or Moody’s for losses they faced in their portfolios.
Parties who invest in securities rated by MIS or issued by MIS-rated entities have pursued claims against MIS or Moody’s for losses they faced in their portfolios.
There is price competition in the credit rating, research, and credit risk management markets, as well as in the market for research, business intelligence and analytical services offered by MA. Moody’s faces competition globally from other CRAs and from investment banks and brokerage firms that offer credit opinions in research, as well as from in-house research operations.
There is price competition in the credit rating, research, and credit risk management segments, as well as in the segment for research, business intelligence and analytical services offered by MA. Moody’s faces competition globally from other CRAs and from investment banks and brokerage firms that offer credit opinions in research, as well as from in-house research operations.
The Company Is Exposed to Risks Related to Protection of Confidential and Personal Information To conduct its operations, the Company regularly moves data across national borders, and consequently is subject to a variety of continuously evolving and developing laws and regulations in the U.S. and abroad regarding privacy, data protection and data security, such as the Federal Trade Commission Act in the U.S., the GDPR in the EU, the GDPR in the U.K., the Cyber Security Law, the Data Security Law, and the Personal Information Protection Law in China and various other international, federal, state 34 MOODY'S 2023 10-K Table of Contents and local laws and regulations.
The Company Is Exposed to Risks Related to Protection of Confidential and Personal Information To conduct its operations, the Company regularly moves data across national borders, and consequently is subject to a variety of continuously evolving and developing laws and regulations in the U.S. and abroad regarding privacy, data protection and data security, such as the Federal Trade Commission Act in the U.S., the GDPR in the EU, the GDPR in the U.K., the Cyber Security Law, the Data Security Law, and the Personal Information Protection Law in China and various other international, federal, state and local laws and regulations.
In addition, MIS incorporates climate and other ESG related risks in its rating process, which also could cause reputational risk or could lead to litigation. The Company could fail to achieve, or be perceived to fail to achieve, our net zero 2040 commitment or other ESG-related initiatives, goals or commitments.
Furthermore, MIS incorporates climate and other sustainability-related risks in its rating process, which also could cause reputational risk or could lead to litigation. The Company could fail to achieve, or be perceived to fail to achieve, our net zero 2040 commitment or other sustainability-related initiatives, goals or commitments.
Cybersecurity incidents, including the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data, could cause reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard the Company’s customers’ information, or financial losses that are either not insured against or not fully covered through any insurance maintained by the Company.
Cybersecurity incidents, including the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or 32 MOODY'S 2024 10-K Table of Contents confidential data, could cause reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard the Company’s customers’ information, or financial losses that are either not insured against or not fully covered through any insurance maintained by the Company.
Additionally, as Moody’s develops its Gen AI product offerings and/or its uses of Gen AI, the Company may face increased regulatory scrutiny and exposure to increased litigation.
Additionally, as Moody’s develops its Gen AI product offerings and/or increases its use of Gen AI, the Company may face increased regulatory scrutiny and exposure to increased litigation.
Moody’s also competes indirectly against consulting firms and technology and information providers, some of whom are also suppliers to Moody’s; these indirect competitors could in the future choose to compete directly with Moody’s, cease doing business with Moody’s or change the terms under which they do business with Moody’s in a way that could negatively impact our business.
Moody’s also MOODY'S 2024 10-K 29 Table of Contents competes indirectly against consulting firms and technology and information providers, some of whom are also suppliers to Moody’s; these indirect competitors could in the future choose to compete directly with Moody’s, cease doing business with Moody’s or change the terms under which they do business with Moody’s in a way that could negatively impact our business.
A number of U.S. states have enacted data privacy laws, including the California Privacy Rights Act of 2020 (“CPRA”), and laws in Virginia, Colorado, Connecticut and Utah which became effective in 2023.
A number of U.S. states have enacted data privacy laws, including the California Privacy Rights Act of 2020 (“CPRA”), and laws in Virginia, Colorado, Connecticut, Utah, Montana, Oregon and Texas, which became effective in 2023 and 2024.
Moody’s future tax rates could be affected by changes in the composition of earnings in countries or states with 28 MOODY'S 2023 10-K Table of Contents differing tax rates or other factors, including by increased earnings in jurisdictions where Moody’s faces higher tax rates, losses incurred in jurisdictions for which Moody’s is not able to realize the related tax benefit, or changes in foreign currency exchange rates.
Moody’s future tax rates could be affected by changes in the composition of earnings in countries or states with differing tax rates or other factors, including by increased earnings in jurisdictions where Moody’s faces higher tax rates, losses incurred in jurisdictions for which Moody’s is not able to realize the related tax benefit, or changes in foreign currency exchange rates.
The Company depends on the ability of Third-Party Technology providers to deliver and support reliable products, enhance their current products, develop new products on a timely and cost-effective basis, provide data necessary to develop and maintain its products and respond to emerging industry standards and other technological changes.
The Company depends on the ability of Third-Party Technology providers to deliver and support reliable products, provide sufficient cloud computing capacity to meet demand, enhance their current products, develop new products on a timely and cost-effective basis, provide data necessary to develop and maintain its products and respond to emerging industry standards and other technological changes.
Factors that may have already affected credibility and could potentially continue to have an impact in this regard include the appearance of a conflict of interest, the performance of securities relative to the rating assigned to such securities, the timing and nature of changes in ratings, a major compliance failure, negative perceptions or publicity and increased criticism by users of ratings, regulators and legislative bodies, including as to the ratings process, or the Company’s recent ESG initiatives and our incorporation of climate- and other ESG- related risks in the Company's rating process, and its implementation with respect to one or more securities and intentional, poor representation of our products and services by our partners or agents, manipulation of our products and services by third parties, or unintentional misrepresentations of Moody’s products and services in advertising materials, public relations information, social media or other external communications.
Factors that may have already affected credibility and could potentially continue to have an impact in this regard include the appearance of conflicts of interest, the performance of securities relative to the ratings assigned to such securities, the timing and nature of changes in ratings and rating methodologies, a major compliance failure, negative perceptions or publicity and increased criticism by users of ratings, regulators and legislative bodies, including as to the ratings process, or the Company’s recent sustainability strategies and our incorporation of climate- and other sustainability-related risks in the Company's rating process, and intentional, poor representation of our products and services by our partners or agents, manipulation of our products and services by third parties, or unintentional misrepresentations of Moody’s products and services in advertising materials, public relations information, social media or other external communications.
For example: – MIS is a registered entity and is therefore subject to formal regulation and periodic or other inspections in the EU and other foreign jurisdictions, such as, but not limited to, Hong Kong and China, where it operates through registered subsidiaries. – In the EU and the U.K., applicable rules include procedural requirements with respect to credit ratings of sovereign issuers, liability for intentional or grossly negligent failure to abide by applicable regulations, mandatory rotation requirements of CRAs hired by issuers of securities for credit ratings of resecuritizations, and restrictions on CRAs or their shareholders if certain ownership thresholds are crossed.
For example: – MIS is subject to formal regulation and periodic or other inspections in the EU and other foreign jurisdictions, such as, but not limited to, the U.K., Australia, Singapore, Japan, and Hong Kong, where it operates through registered subsidiaries. – In the EU and the U.K., applicable rules include procedural requirements with respect to credit ratings of sovereign issuers, liability for intentional or grossly negligent failure to abide by applicable regulations, mandatory analyst rotation requirements, and restrictions on CRAs or their shareholders if certain ownership thresholds are crossed.
For example, new laws and regulations may affect MIS’s communications with issuers as part of the rating assignment process, alter the manner in which MIS’s credit ratings are developed, assigned and communicated, affect the manner in which MIS or its customers or users of credit ratings operate, impact the demand for MIS’s credit ratings and alter the economics of the credit ratings business, including by restricting or mandating business models for CRAs.
In turn, such developments may affect MIS’s communications with issuers as part of the rating assignment process, alter the manner in which MIS’s credit ratings are developed, assigned and communicated, affect the manner in which MIS or its customers or users of credit ratings operate, impact the demand for MIS’s credit ratings or alter the economics of the credit ratings business, including by restricting or mandating business models for CRAs.
Credit ratings emanating from outside the EU are subject to ESMA’s oversight if they are endorsed into the EU, and ratings endorsed into the U.K. are similarly subject to oversight of the FCA. Additionally, other foreign jurisdictions have taken measures to increase regulation of CRAs and markets for credit ratings.
Credit ratings emanating from outside the EU are subject to ESMA's oversight if they are endorsed into the EU, and ratings endorsed into the U.K. are similarly subject to oversight of the FCA. Additionally, other foreign jurisdictions, such as Australia and Hong Kong and China, have taken measures to increase regulation of CRAs and markets for credit ratings.
Any significant failure, compromise, cyber-breach, interruption or a significant slowdown of operations of the Company’s infrastructure, whether due to human error, capacity constraints, hardware failure or defect, weather (including climate change), natural disasters, fire, power loss, telecommunication failures, break-ins, sabotage, intentional acts of vandalism, acts of terrorism, political unrest, pandemic, war or otherwise, may impair the Company’s ability to deliver its products and services.
Any significant failure, compromise, cyber-breach, interruption or a significant slowdown of operations of the Company’s infrastructure, whether due to human error, capacity constraints, hardware failure or defect, weather (including climate-related risks), natural disasters, fire, power loss, telecommunication failures, break-ins, 28 MOODY'S 2024 10-K Table of Contents sabotage, intentional acts of vandalism, acts of terrorism, political unrest, pandemic, war or otherwise, may impair the Company’s ability to deliver its products and services.
Current market, economic and government factors are negatively impacting the volume of debt securities issued in global capital markets and the demand for credit ratings, which is materially and adversely affecting the Company’s business, operating results and financial condition.
Current market, economic and government factors could negatively impact the volume of debt securities issued in global capital markets and the demand for credit ratings, which is materially and adversely affect the Company’s business, operating results and financial condition.
When the market value of credit-dependent instruments has declined or defaults have occurred, whether as a result of difficult economic times, turbulent markets or otherwise, the number of investigations and legal proceedings that Moody’s has faced has increased significantly.
When the market value of credit-dependent instruments has declined or defaults have occurred, whether as a result of difficult economic times, rapid changes in interest rates, decreased liquidity, turbulent markets or otherwise, the number of investigations and legal proceedings that Moody’s has faced has increased significantly.
MOODY'S 2023 10-K 31 Table of Contents The Company Is Exposed to Reputation and Credibility Concerns. Moody’s reputation and the strength of its brand are key competitive strengths. To the extent that the rating agency business as a whole or Moody's, relative to its competitors, suffers a loss in credibility, Moody’s business will be significantly impacted.
The Company Is Exposed to Reputation and Credibility Concerns. Moody’s reputation and the strength of its brand are key competitive strengths. To the extent that the credit rating business as a whole or Moody's, relative to its competitors, suffers a loss in credibility, Moody’s business will be significantly impacted.
The current laws and regulations: – seek to encourage, and may result in, increased competition among CRAs and in the credit rating business; – may result in alternatives to credit ratings or changes in the pricing of credit ratings; – restrict the use of information in the development or maintenance of credit ratings; – increase regulatory oversight of the credit markets and CRA operations; – provide the SEC with direct jurisdiction over CRAs that seek NRSRO status, and grant authority to the SEC to inspect the operations of CRAs; and – provide for enhanced oversight standards and specialized pleading standards, which may result in increases in the number of legal proceedings claiming liability for losses suffered by investors on rated securities and aggregate legal defense costs.
The current U.S. laws and regulations relating to MIS, including the Reform Act and the Dodd-Frank Act: – seek to encourage, and may result in, increased competition among CRAs and in the credit rating business; – may result in alternatives to credit ratings, changes in the pricing of credit ratings, and/or diminished intellectual property protection relating to credit ratings and related research produced by MIS; – restrict the use of information in the development or maintenance of credit ratings; – increase regulatory oversight of the credit markets and CRA operations; – provide the SEC with direct jurisdiction over CRAs that seek NRSRO status, and grant authority to the SEC to inspect the operations of CRAs; and – provide for enhanced oversight standards and specialized pleading standards, which may result in increases in the number of legal proceedings claiming liability for losses suffered by investors on rated securities and aggregate legal defense costs.
Due to the number of these proceedings and the significant amount of damages sought, there is a risk that Moody’s will be subject to judgments, settlements, fines, penalties or other adverse results that have a material adverse effect on its business, operating results and financial condition. The Company Is Exposed to Risks Related to Its Compliance and Risk Management Programs.
Due to the potential number of these proceedings and the significant amount of damages that could be sought, there is a risk that Moody’s will be subject to judgments, settlements, fines, penalties or other adverse results that have a material adverse effect on its business, operating results and financial condition.
Moody’s ability to conduct business may be materially and adversely impacted by a disruption in the infrastructure that supports its businesses and the communities in which Moody’s is located, including: (i) New York City, the location of Moody’s headquarters, (ii) major cities worldwide in which Moody’s has offices, (iii) locations that may be affected by the Russia-Ukraine military conflict and the military conflict in Israel and surrounding areas; and (iv) locations in China used for certain Moody’s work.
Moody’s ability to conduct business may be materially and adversely impacted by a disruption in the infrastructure that supports its businesses and the communities in which Moody’s is located, including: (i) New York City, the location of Moody’s headquarters, (ii) major cities worldwide in which Moody’s has offices, and (iii) locations that may be affected by the Russia-Ukraine military conflict and the military conflict in the Middle East.
In particular, the EU has adopted a common regulatory framework for CRAs operating in the EU and continues to monitor the credit rating industry and analyze approaches that may strengthen existing regulation.
In particular, the EU has adopted a common regulatory framework for CRAs operating in the EU, continues to monitor the credit rating industry and analyze approaches that may strengthen existing regulation. The U.K. also has adopted a regulatory framework for CRAs that is based on the EU version.
We could be subject to litigation or regulatory enforcement actions regarding the accuracy, sufficiency or completeness of our ESG-related disclosures. Our actual or perceived failure to achieve our ESG-related initiatives, goals or commitments could negatively impact our reputation or otherwise materially harm our business.
We could be subject to litigation or regulatory enforcement actions regarding the accuracy, sufficiency or completeness of our sustainability-related 30 MOODY'S 2024 10-K Table of Contents disclosures. Our actual or perceived failure to achieve our sustainability-related initiatives, goals or commitments could negatively impact our reputation or otherwise materially harm our business.
For instance, MOODY'S 2023 10-K 27 Table of Contents Moody’s faced numerous class action lawsuits and other litigation, government investigations and inquiries concerning events linked to the U.S. subprime residential mortgage sector and broader deterioration in the credit markets during the financial crisis of 2007-2008.
For instance, Moody’s faced numerous class action lawsuits and other litigation, government investigations and inquiries (including market studies) concerning events linked to the U.S. subprime residential mortgage sector and broader deterioration in the credit markets during and after the financial crisis of 2007-2008.
Moody’s operates in a number of countries, and as a result the Company is required to comply with and quickly adapt to numerous international and U.S. federal, state and local laws and regulations.
The Company Is Exposed to Risks Related to Its Compliance and Risk Management Programs. Moody’s operates in a number of countries, and as a result the Company is required to comply with and quickly adapt to numerous international and U.S. federal, state and local laws and regulations.
In addition, the Company’s operating results can be adversely affected by inadequate or changing legal and technological protections for intellectual property and proprietary rights in some jurisdictions and markets, including if and how rights in these markets evolve to address advances in LLMs and Gen AI.
In addition, the Company’s operating results can be adversely affected by inadequate or changing legal and technological protections for intellectual property and proprietary rights in some jurisdictions and markets, including if and how rights in these markets evolve to address unauthorized or unintended use of intellectual property from new technologies like Gen AI.
Our business could be negatively impacted by climate change . As a global company, our employees and offices, as well as those of our vendors, are subject to risks related to the impact of climate change. We have offices in locations that are vulnerable to the effects of climate change and extreme weather.
MOODY'S 2024 10-K 31 Table of Contents Our business could be negatively impacted by climate change . As a global company, our employees and offices are subject to risks related to the impact of climate change. We have offices in locations that are vulnerable to the effects of climate change and extreme weather.
In addition, MIS Hong Kong is subject to a code of conduct applicable to CRAs that imposes procedural and substantive requirements on the preparation and issuance of credit ratings, restrictions on activities deemed to create a conflict of interest including the disclosure of its compensation arrangements with rated entities and special requirements for credit ratings of structured finance instruments.
In addition, MIS Hong Kong is subject to a code of conduct applicable to CRAs that imposes procedural and substantive requirements on the preparation and issuance of credit ratings, restrictions on activities deemed to create a conflict of interest including the disclosure of its compensation arrangements with rated entities and special requirements for credit ratings of structured finance instruments. – In China, while MIS is not a licensed CRA, it does issue global credit ratings on Chinese issuers from offices outside of China.
Data privacy laws have also been passed in numerous U.S. states, including Iowa, Indiana, Tennessee, Montana, Texas, Delaware, New Jersey and Oregon that will go into effect over the course of 2024, 2025 and 2026.
Data privacy laws have also been passed in numerous U.S. states, including Iowa, Indiana, Tennessee, Delaware, New Jersey, Kentucky, Maryland, Minnesota, Nebraska, New Hampshire and Rhode Island that will go into effect over the course of 2024, 2025 and 2026.
Further volatility in the financial markets, including continued decreases in the volumes of debt securities and increases in interest rates, may have a material adverse effect on the business, operating results and financial condition, which the Company may not be able to successfully offset with cost reductions. The Company Faces Increased Pricing Pressure from Competitors and/or Customers.
Further volatility in the financial markets, including decreases in the volumes of debt securities, increases in interest rates, and fluctuations in credit spreads, may have a material adverse effect on the business, operating results and financial condition, which the Company may not be able to successfully offset with cost reductions.
Moody’s faces exposure to litigation and government and regulatory proceedings, investigations and inquiries related to MIS’s ratings actions, as well as other business practices and products within both MIS and MA.
The Company Faces Exposure to Litigation and Government Regulatory Proceedings, Investigations and Inquiries (Including Competition Market Studies) Related to Rating Opinions and Other Business Practices. Moody’s faces exposure to litigation and government and regulatory proceedings, investigations and inquiries (including market studies) related to MIS’s ratings actions, as well as other business practices and products within both MIS and MA.
This can result in delayed or reduced sales to such customers, adversely affect MA’s relationship with such customers, increase the costs of doing business with such customers and/or result in MA assuming greater financial and legal risk under its agreements with such customers.
MOODY'S 2024 10-K 25 Table of Contents Legal and regulatory developments can result in delayed or reduced sales to MA’s customers, adversely affect MA’s relationship with such customers, increase the costs of doing business with such customers and/or result in MA assuming greater financial and legal risk under its agreements with such customers.
At December 31, 2023, Moody’s had $5,956 million of goodwill and $2,049 million of intangible assets on its balance sheet. Approximately 95% of the goodwill and intangible assets reside in the MA business and are allocated to the two reporting units within MA. The remaining 5% of goodwill and intangible assets reside in MIS and primarily relate to ICRA.
At December 31, 2024, Moody’s had $5,994 million of goodwill and $1,890 million of intangible assets on its balance sheet. Approximately 94% of the goodwill and intangible assets reside in the MA business and are allocated to the two reporting units within MA. The remaining 6% of goodwill and intangible assets reside in MIS and primarily relate to ICRA.
Recent Financial Market Conditions, Including Decreased Asset Levels and Flows into Investment Vehicles, Increases in Interest Rates and Other Volatility Has Had, and May Continue to Have, a Material Adverse Impact on the Volume of Debt Securities Issued. Moody’s business is impacted by general economic conditions and volatility in world financial markets.
The Economics of the Company’s Business is Dependent on the Volume of Debt Securities Issued in Domestic and/or Global Capital Markets. Recent Financial Market Conditions, Including Decreased Asset Levels and Flows into Investment Vehicles, Increases in Interest Rates and Other Volatility Has Had, and May Continue to Have, a Material Adverse Impact on the Volume of Debt Securities Issued.
In light of this, MA’s existing or potential bank and financial services customers subject to this guidance have sought to and may further revise their third-party risk management policies and processes and the terms on which they do business with MA.
In light of this, MA’s existing or potential bank and financial services customers subject to this guidance have sought to and may further revise their third-party risk management policies and processes and the terms on which they do business with MA. – In China, MA is licensed to provide subscriptions to credit research and ratings data and other information relevant to the financial markets.
The frequency and impact of extreme weather events on critical infrastructure has the potential to disrupt the Company’s ongoing operations, as well as the operations of our third-party vendors and customers, and may result in losses and additional costs to maintain or resume operations. C.
The frequency and impact of extreme weather events on critical infrastructure has the potential to disrupt the Company’s ongoing operations, as well as the operations of our vendors and customers, and may result in losses and additional costs to maintain or resume operations. C. Technology Risks The Company Is Exposed to Risks Related to Cybersecurity and Protection of Confidential Information.
We communicate certain ESG-related initiatives, goals and/or commitments (including with respect to environmental matters, diversity and other matters), in our various public disclosures, Task Force on Climate-related Financial Disclosures Report, on our website, in our filings with the SEC and elsewhere. These initiatives, goals or commitments could be challenging to achieve and costly to implement.
We communicate certain sustainability initiatives, goals and commitments (including with respect to environmental matters, social matters and other matters), in our various public disclosures, Task Force on Climate-related Financial Disclosures Report, on our website, in our filings with the SEC and elsewhere.
Cost reductions, including those associated with this program, may be difficult or impossible to obtain in the short term, due in part to rent, technology, compliance, compensation and other fixed costs associated with some of the Company’s operations as well as the need to monitor outstanding ratings.
Moody’s initiatives to reduce costs to counteract a decline in its business may not be sufficient. Cost reductions may be difficult or impossible to obtain in the short term, due in part to rent, technology, compliance, compensation and other fixed costs associated with some of the Company’s operations as well as the need to monitor outstanding ratings.
A. Legal and Regulatory Risks Moody’s Faces Risks Related to U.S. Laws and Regulations Applicable to the Financial Industry that Affect th e Credit Rating Industry and Moody’s Customers. Moody’s operates in a highly regulated industry and is subject to extensive regulation by federal, state and local authorities in the U.S., including the Reform Act and the Dodd-Frank Act.
A. Legal and Regulatory Risks Moody’s Faces Risks Related to Laws and Regulations that Affect the Financial Industry, Including the Credit Rating Industry, Moody's Businesses and Moody’s Customers. Moody’s is subject to extensive regulation by federal, state and local authorities in the U.S. and by foreign jurisdictions.
Competition for customers and market share has spurred more aggressive tactics by some competitors in areas such as pricing and services, as well as increased competition from non-NRSROs that evaluate debt risk for issuers or investors, and the emergence of LLMs, Gen AI and other technologies may further intensify these pressures.
Competition for customers and market share has spurred more aggressive tactics by some competitors in areas such as pricing and services, as well as increased competition from non-NRSROs that evaluate debt risk for issuers or investors.
Moody’s policies and procedures to identify, evaluate and manage the Company’s risks, including risks resulting from acquisitions, may not be fully effective, and Moody’s employees or agents may engage in misconduct, fraud or other errors.
Moody’s policies and procedures to identify, evaluate and manage the Company’s risks, including risks resulting from acquisitions and from Gen AI developments (such as maintaining the quality and integrity of data of Gen AI product offerings), may not be fully effective, and Moody’s employees or agents may engage in misconduct, fraud or other errors.
Additionally, other countries have enacted or are enacting data localization laws that require data to stay within their borders. Further, laws such as the California Consumer Privacy Act of 2018 ("CCPA"), require among other things, covered companies to provide disclosures to consumers, and affords consumers the ability to opt-out of certain sales of personal information.
Further, laws such as the California Consumer Privacy Act of 2018 ("CCPA"), require among other things, covered companies to provide disclosures to consumers, and affords consumers the ability to opt-out of certain sales of personal information.
In addition, customers or others may develop alternative, proprietary systems for assessing risk, including credit and climate risk. Such developments could affect demand for Moody’s products and services and its growth prospects. Further, the increased availability in recent years of free or relatively inexpensive internet information may reduce the demand for Moody’s products and services.
In addition, customers or others may develop alternative, proprietary systems for assessing risk, including credit and climate risk. Such developments could affect demand for Moody’s products and services and its growth prospects.
Any inability of Moody’s to compete successfully may have a material adverse effect on its business, operating results and financial condition. Moody’s Is Exposed to Risks Related to Loss of Skilled Employees and Related Compensation Cost Pressures. Moody’s success depends upon its ability to recruit, retain and motivate highly skilled, experienced professionals, including financial analysts, data scientists and software engineers.
Moody’s Is Exposed to Risks Related to Loss of Skilled Employees and Related Compensation Cost Pressures. Moody’s success depends upon its ability to recruit, retain and motivate highly skilled, experienced professionals, including financial analysts, data scientists and software engineers.
Affecting the Credit Rating Industry, Moody’s Businesses, and Moody’s Customers. In addition to the extensive and evolving U.S. laws and regulations governing the credit rating industry, foreign jurisdictions have taken measures to regulate CRAs and the markets for credit ratings.
In addition to the extensive and evolving U.S. laws and regulations governing the credit rating industry, foreign jurisdictions have taken measures to regulate CRAs and the markets for credit ratings that significantly impact the operations and the markets for the Company's ratings-related products and services.
Such laws are broadly crafted and the implementation, interpretation and enforcement of such laws are subject to the broad discretion of Chinese regulators, which could affect the Company’s ability to conduct business in China. – In addition, U.S. economic sanctions have increasingly targeted Chinese persons.
China has laws applicable to Moody’s that are broadly crafted, and the implementation, interpretation and enforcement of such laws are subject to the broad discretion of Chinese regulators, which could affect the Company’s ability to conduct business in China.
From time to time, laws are passed that require publication of certain information, in some cases at no cost, that the Company considers to be its intellectual property and that it currently sells or licenses for a fee, which could result in lost revenue.
From time to time, laws are passed that require publication of certain information, in some cases at no cost, that the Company considers to be its intellectual property and that it currently sells or licenses for a fee, which could result in lost revenue. 26 MOODY'S 2024 10-K Table of Contents Unauthorized third parties may also try to obtain and use technology or other information that the Company regards as proprietary.
The Company cannot predict with certainty all of the adverse effects that could result from the Company’s failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions.
The Company cannot predict with certainty all of the adverse effects that could result from the Company’s failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. A disruption to Moody’s operations or infrastructure may have a material adverse effect on its reputation, business, operating results and financial condition.
A failure to comply with these procedural and substantive requirements also exposes MIS Hong Kong to the risk of regulatory enforcement action which could result in financial penalties or, in serious cases, affect its ability to conduct credit rating activities in Hong Kong. – In China, while MIS is not a licensed CRA, it does issue global credit ratings on Chinese issuers from offices outside of China.
A failure to comply with these procedural and substantive requirements also exposes MIS to the risk of regulatory enforcement action which could result in financial penalties or, in serious cases, affect its ability to conduct credit rating activities in certain jurisdictions.
Although past incidents have not had a material adverse effect on the Company's operating results, there can be no assurance of a similar result in the future.
Despite the Company’s best efforts, it is not fully insulated from, and has in the past experienced, security threats and system disruptions. Although past incidents have not had a material adverse effect on the Company's operating results, there can be no assurance of a similar result in the future.
Such conflicts could eventually affect the ability of entities to adhere to applicable laws. With respect to MA, regulators in Europe and other foreign markets in which MA is active have issued guidance similar to that issued in the U.S. relating to financial institutions’ assessment and management of risks associated with third-party relationships.
This guidance requires more rigorous oversight of third-party relationships that involve certain "critical activities." – Regulators in Europe and other foreign markets in which MA is active have issued guidance similar to that issued in the U.S. relating to financial institutions' assessment and management of risks associated with third-party relationships.
Additionally, the cost and operational consequences of implementing, maintaining and enhancing further data or system protection measures could increase significantly to overcome increasingly intense, complex and sophisticated global cyber threats. Despite the Company’s best efforts, it is not fully insulated from, and has in the past experienced, security threats and system disruptions.
Additionally, the cost and operational consequences of implementing, maintaining and enhancing further data or system protection measures could increase significantly to overcome increasingly intense, complex and sophisticated global cyber threats. Gen AI has contributed to an increase in the prevalence and sophistication of cyber threats, expanding the Company's exposure to disruptions.
In addition, certain aspects of the Company’s business rely on a concentrated group of vendors, and a cybersecurity breach or event at one or more of such vendors could have a significant impact on the Company’s operations. The Company also monitors its use of Third-Party Technology to comply with applicable license and other contractual requirements.
In addition, certain aspects of the Company’s business rely on a concentrated group of vendors, and a cybersecurity breach or event and/or an error caused by one or more of such vendors could have a significant impact on the Company’s operations, as well as the operations of the Company's customers and other Third-Party Technology.
Such information relates to its business operations and confidential and sensitive information about its MOODY'S 2023 10-K 33 Table of Contents customers and employees in the Company’s computer systems and networks, and in those of its third-party vendors.
The Company’s operations rely on the secure processing, storage and transmission of confidential, sensitive, proprietary and other types of information. Such information relates to its business operations and confidential and sensitive information about its customers and employees in the Company’s computer systems and networks, and in those of its third-party vendors.
These factors include increases in or uncertainty around interest rates (as well as related monetary policy by governments in the response to factors such as inflation), the withdrawal of COVID-19 economic stimulus, inflationary pressures, increases or volatility in mortgage rates, widening credit spreads, regulatory and political developments (including uncertainty in various jurisdictions where Moody's operates), difficult economic conditions, growth in the use of alternative sources of credit, and defaults by significant issuers.
These factors include increases in or uncertainty around interest rates (as well as related monetary policy by governments in the response to factors such as inflation, inflationary pressures, increases or volatility in mortgage rates, widening credit spreads, regulatory and political developments (including the change in the U.S.
Moody’s also may not be able to identify and hire the appropriate qualified employees in some markets outside the U.S. with the required experience or skills to perform sophisticated credit analysis.
Investment banks, investors and competitors may seek to attract analyst talent by providing more favorable working conditions or offering significantly more attractive compensation packages than Moody’s. Moody’s also may not be able to identify and hire the appropriate qualified employees in some markets outside the U.S. with the required experience or skills to perform sophisticated credit analysis.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeInternal and external teams, including the Cyber Committee, conduct activities such as penetration testing, red teaming, tabletop exercises and phishing drills. Results are measured and assessed for possible improvements. In addition to these ongoing efforts, the Company has a set of third-party risk management tools through which it monitors for cybersecurity risks and threats associated with its third-party service providers.
Biggest changeIn addition to these ongoing efforts, the Company has a set 34 MOODY'S 2024 10-K Table of Contents of third-party risk management tools through which it monitors for cybersecurity risks and threats associated with its third-party service providers.
In addition, the Company's Internal Controls Department performs an independent assessment of the design and operating effectiveness of the Company’s network of cybersecurity controls in accordance with the NIST Framework. The results of the assessment are periodically shared with the Cyber Committee and the Audit Committee. The Company’s cybersecurity environment is also subject to routine vulnerability assessment processes.
In addition, the Company's Internal Controls Department performs an independent assessment of the design and operating effectiveness of the Company’s network of cybersecurity controls in accordance with the NIST Framework. The results of the assessment are periodically shared with the Cyber Committee. The Company’s cybersecurity environment is also subject to routine vulnerability assessment processes.
At December 31, 2023, the Company’s internal cybersecurity team consisted of members located in various countries and time zones across the world. The team has members with experience in governance, risk management and compliance, threat monitoring, threat emulation, penetration testing and cyber incident management.
At December 31, 2024, the Company’s internal cybersecurity team consisted of members located in various countries and time zones across the world. The team has members with experience in governance, risk management and compliance, threat monitoring, threat emulation, penetration testing and cyber incident management.
The Cyber Committee, chaired by the CISO, and whose members include the CTSO and CAO, as well as other members of senior management and the legal team, is responsible for identifying cybersecurity risks and threats, recommending mitigating actions to strengthen cybersecurity resilience, and meeting risk tolerance thresholds established by senior management.
The Cyber Committee, chaired by the CISO, and whose members include the CTSO, CAO and Chief Risk & Resiliency Officer, as well as other members of senior management and the legal team, is responsible for identifying cybersecurity risks and threats, recommending mitigating actions to strengthen cybersecurity resilience, and meeting risk tolerance thresholds established by senior management.
The cybersecurity program is an important part of the Company’s enterprise risk management (ERM), with the head of the Company’s ERM program sitting on the Cyber Committee, and sets forth a process for escalating certain incidents to the Company’s ERM group integrated into the Company’s Incident Response Plan.
The cybersecurity program is an important part of the Company’s enterprise risk management (ERM), with the head of the Company’s ERM program (the Chief Risk & Resiliency Officer) sitting on the Cyber Committee, and sets forth a process for escalating certain incidents to the Company’s ERM group integrated into the Company’s Incident Response Plan.
The 36 MOODY'S 2023 10-K Table of Contents Company is audited in connection with requirements set forth in the Sarbanes-Oxley Act of 2002, and Moody’s Analytics obtains third-party audits in connection with ISO 27001 and SOC 2 certification and attestation reports, respectively, for certain products.
The Company is audited in connection with requirements set forth in the Sarbanes-Oxley Act of 2002, and Moody’s Analytics obtains third-party audits in connection with the ISO 27001 certification and SOC 1 and SOC 2 attestation reports, respectively, for certain products.
The Cyber MOODY'S 2023 10-K 35 Table of Contents Committee also validates that the Company has appropriate people, process and technology capabilities to identify, mitigate and report on cybersecurity risks to the executive leadership team and the Board of Directors.
The Cyber Committee also validates that the Company has appropriate people, process and technology capabilities to identify, mitigate and report on cybersecurity risks to the executive leadership team and the Board of Directors.
Added
Internal and external teams, including the Cyber Committee, conduct activities such as penetration testing, red teaming, tabletop exercises and phishing drills. Results are measured and assessed for possible improvements.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Moody’s corporate headquarters is located at 7 World Trade Center at 250 Greenwich Street, New York, New York 10007. As of December 31, 2023, Moody’s operations were conducted from 31 U.S. offices and 81 non-U.S. office locations, all of which are leased. These properties are geographically distributed to meet operating and sales requirements worldwide.
Biggest changeITEM 2. PROPERTIES Moody’s corporate headquarters is located at 7 World Trade Center at 250 Greenwich Street, New York, New York 10007. As of December 31, 2024, Moody’s operations were conducted from 29 U.S. offices and 102 non-U.S. office locations, all of which are leased. These properties are geographically distributed to meet operating and sales requirements worldwide.
These properties are generally considered to be both suitable and adequate to meet current operating requirements. ITEM 3. LEGAL PROCEEDINGS For information regarding legal proceedings, see Part II, Item 8 – “Financial Statements,” Note 21 “Contingencies” in this Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
These properties are generally considered to be both suitable and adequate to meet current operating requirements. ITEM 3. LEGAL PROCEEDINGS For information regarding legal proceedings, see Part II, Item 8 – “Financial Statements,” Note 19 “Contingencies” in this Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 40 The Company 40 Current Matters Impacting Moody's Business 40 Critical Accounting Estimates 40 Reportable Segments 44 Results of Operations 45 Market Risk 59 Liquidity and Capital Resources 60 Recently Issued Accounting Pronouncements 65 Contingencies 65 Forward-Looking Statements 65 2 MOODY'S 2023 10-K Table of Contents Page Item 7A.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 38 The Company 38 Critical Accounting Estimates 38 Reportable Segments 41 Results of Operations 42 Market Risk 56 Liquidity and Capital Resources 57 Recently Issued Accounting Pronouncements 61 Contingencies 61 Forward-Looking Statements 61
Item 4. MINE SAFETY DISCLOSURES 37 PART II. Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 37 Moody’s Purchases of Equity Securities 37 Common Stock Information 38 Equity Compensation Plan Information 38 Performance Graph 39 Item 7.
Item 4. MINE SAFETY DISCLOSURES 35 PART II. Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 35 Moody’s Purchases of Equity Securities 36 Common Stock Information 36 Equity Compensation Plan Information 36 Performance Graph 37 Item 7.
Removed
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 67 Item 8. FINANCIAL STATEMENTS 67

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(2) As of the last day of each of the months. On February 7, 2022, the Board of Directors authorized $750 million of share repurchase authority. At December 31, 2023, there was approximately $359 million of share repurchase authority remaining under this authorization. On February 5, 2024, the Board of Directors authorized an additional $1 billion in share repurchase authority.
Biggest change(2) As of the last day of each of the months. On February 5, 2024, the Board of Directors authorized $1 billion in share repurchase authority. On October 15, 2024, the Board authorized an additional $1.5 billion in share repurchase authority. At December 31, 2024, there was approximately $1.6 billion of share repurchase authority remaining under these authorizations.
The comparison assumes that $100.00 was invested in the Company’s common stock and in each of the foregoing indices on December 31, 2018. The comparison also assumes the reinvestment of dividends, if any.
The comparison assumes that $100.00 was invested in the Company’s common stock and in each of the foregoing indices on December 31, 2019. The comparison also assumes the reinvestment of dividends, if any.
Assuming payout at target, the number of shares to be issued upon the vesting of outstanding performance share awards is 297,070. (2) Does not reflect unvested restricted stock units or performance share awards included in column (a) because these awards have no exercise price.
Assuming payout at target, the number of shares to be issued upon the vesting of outstanding performance share awards is 315,665. (2) Does not reflect unvested restricted stock units or performance share awards included in column (a) because these awards have no exercise price.
The total return for the Company's common stock was 192% during the performance period as compared with a total return during the same period of 107% and 97% for the S&P 500 Composite Index and the Russell 3000 Financial Services Index, respectively.
The total return for the Company's common stock was 108% during the performance period as compared with a total return during the same period of 97% and 85% for the S&P 500 Composite Index and the Russell 3000 Financial Services Index, respectively.
This number also includes a maximum of 594,140 performance shares outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, which is the maximum number of shares issuable pursuant to performance share awards assuming the maximum payout of 200% of the target award for performance shares granted in 2021, 2022 and 2023.
This number also includes a maximum of 599,596 performance shares outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, which is the maximum number of shares issuable pursuant to performance share awards assuming the maximum payout of the target award for performance shares granted in 2022, 2023 and 2024.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column (a)) (a) (b) (c) Equity compensation plans approved by security holders 2,732,417 (1) $ 212.29 19,736,943 (3) Equity compensation plans not approved by security holders — $ — — Total 2,732,417 $ 212.29 19,736,943 (1) Includes 2,065,581 options and unvested restricted stock units outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, 66,855 options and unvested restricted stock units outstanding under the Risk Management Solutions, Inc. 2015 Equity Incentive Plan and 5,841 unvested restricted stock units outstanding under the 1998 Non-Employee Directors' Stock Incentive Plan.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column (a)) (a) (b) (c) Equity compensation plans approved by security holders 2,563,379 (1) $ 267.64 18,949,656 (3) Equity compensation plans not approved by security holders — $ — — Total 2,563,379 $ 267.64 18,949,656 (1) Includes 1,927,315 options and unvested restricted stock units outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, 31,168 options and unvested restricted stock units outstanding under the Risk Management Solutions, Inc. 2015 Equity Incentive Plan and 5,300 unvested restricted stock units outstanding under the 1998 Non-Employee Directors' Stock Incentive Plan.
(3) Includes 15,956,514 shares available for issuance as under the 2001 Stock Incentive Plan, of which all may be issued as options and 10,173,336 may be issued as awards of unrestricted shares, restricted stock, restricted stock units, performance shares or any other stock-based awards under the 2001 Stock Incentive Plan, 449,049 shares available for issuance as options or restricted stock units under the Risk Management Solutions, Inc. 2015 Equity Incentive Plan, 866,673 shares available for issuance as options, shares of restricted stock, restricted stock units or performance shares under the 1998 Directors Plan, and 2,464,707 shares available for issuance under the Company’s Employee Stock Purchase Plan. 38 MOODY'S 2023 10-K Table of Contents PERFORMANCE GRAPH The following graph compares the total cumulative shareholder return of the Company to the performance of Standard & Poor’s 500 Composite Index and the Russell 3000 Financial Services Index.
(3) Includes 15,206,030 shares available for issuance as under the 2001 Stock Incentive Plan, of which all may be issued as options and 9,584,545 may be issued as awards of unrestricted shares, restricted stock, restricted stock units, performance shares or any other stock-based awards under the 2001 Stock Incentive Plan, 466,831 shares available for issuance as options or restricted stock units under the Risk Management Solutions, Inc. 2015 Equity Incentive Plan, and 861,174 shares available for issuance as options, shares of restricted stock, restricted stock units or performance shares under the 1998 Directors Plan, and 2,415,621 shares available for issuance under the Company’s Employee Stock Purchase Plan. 36 MOODY'S 2024 10-K Table of Contents PERFORMANCE GRAPH The following graph compares the total cumulative shareholder return of the Company to the performance of Standard & Poor’s 500 Composite Index and the Russell 3000 Financial Services Index.
There is no established expiration date for the remaining authorizations. During the fourth quarter of 2023, Moody’s issued a net 100 thousand shares under employee stock-based compensation plans. MOODY'S 2023 10-K 37 Table of Contents COMMON STOCK INFORMATION The Company’s common stock trades on the New York Stock Exchange under the symbol “MCO”.
There is no established expiration date for the remaining authorizations. During the fourth quarter of 2024, Moody’s issued a net 83 thousand shares under employee stock-based compensation plans. COMMON STOCK INFORMATION The Company’s common stock trades on the New York Stock Exchange under the symbol “MCO”. The number of registered shareholders of record at January 31, 2025 was 1,362.
The number of registered shareholders of record at January 31, 2024 was 1,461. A substantially greater number of the Company’s common stock is held by beneficial holders whose shares of record are held by banks, brokers and other financial institutions.
A substantially greater number of the Company’s common stock is held by beneficial holders whose shares of record are held by banks, brokers and other financial institutions. EQUITY COMPENSATION PLAN INFORMATION The table below sets forth, as of December 31, 2024, certain information regarding the Company’s equity compensation plans.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Moody’s Corporation, the Standard & Poor’s 500 Composite Index, and the Russell 3000 Financial Services Index Year Ended December 31, 2018 2019 2020 2021 2022 2023 Moody’s Corporation $ 100.00 $ 171.25 $ 211.11 $ 286.21 $ 206.05 $ 291.60 S&P 500 Composite Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Russell 3000—Financial Services Index $ 100.00 $ 137.65 $ 136.25 $ 187.43 $ 160.35 $ 196.70 The comparisons in the graph above are provided in response to disclosure requirements of the SEC and are not intended to forecast or be indicative of future performance of the Company’s common stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Moody’s Corporation, the Standard & Poor’s 500 Composite Index, and the Russell 3000 Financial Services Index Year Ended December 31, 2019 2020 2021 2022 2023 2024 Moody’s Corporation $ 100.00 $ 123.28 $ 167.13 $ 120.32 $ 170.28 $ 208.01 S&P 500 Composite Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Russell 3000—Financial Services Index $ 100.00 $ 98.99 $ 136.16 $ 116.49 $ 142.90 $ 184.70 The comparisons in the graph above are provided in response to disclosure requirements of the SEC and are not intended to forecast or be indicative of future performance of the Company’s common stock.
MOODY’S PURCHASES OF EQUITY SECURITIES For the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under The Program (2) October 1- 31 154,055 $ 315.47 143,847 $527 million November 1- 30 281,831 $ 341.59 280,953 $431 million December 1- 31 190,073 $ 378.28 189,577 $359 million Total 625,959 $ 346.80 614,377 (1) Includes surrender to the Company of 10,208; 878; and 496 shares of common stock in October, November and December, respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
MOODY'S 2024 10-K 35 Table of Contents MOODY’S PURCHASES OF EQUITY SECURITIES For the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under The Program (2) October 1- 31 382,909 $ 471.64 374,250 $1,870 million November 1- 30 304,282 $ 474.26 304,006 $1,726 million December 1- 31 329,465 $ 486.13 326,742 $1,567 million Total 1,016,656 $ 477.15 1,004,998 (1) Includes surrender to the Company of 8,659; 276; and 2,723 shares of common stock in October, November and December, respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
Removed
EQUITY COMPENSATION PLAN INFORMATION The table below sets forth, as of December 31, 2023, certain information regarding the Company’s equity compensation plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Financial measure: 2023 2022 % Change Favorable / (Unfavorable) Insight and Key Drivers of Change Compared to Prior Year Moody's total revenue $ 5,916 $ 5,468 8 % — reflects growth in both segments MA external revenue $ 3,056 $ 2,769 10 % — sustained demand for KYC solutions, as well as continued growth from insurance products and SaaS-based banking offerings; — ongoing strong retention for ratings data feeds; and — elevated usage and demand for credit and economic research MIS external revenue $ 2,860 $ 2,699 6 % — increased investment-grade/speculative-grade corporate debt issuance coupled with higher infrastructure finance issuance relative to suppressed activity in the prior year; and — increases in banking-related revenue mainly due to favorable mix of infrequent issuers, as well as higher issuance volumes; partially offset by — declines across most asset classes in SFG reflecting a decrease in securitization activity amidst capital market volatility Total operating and SG&A expenses $ 3,319 $ 3,140 (6 %) — higher incentive compensation accruals and performance-based equity compensation aligned with actual/expected financial and operating performance; and — higher salaries and benefits, primarily reflecting hiring and salary increases in MA to support business growth Depreciation and amortization $ 373 $ 331 (13 %) — higher amortization relating to internally developed software, primarily related to the development of MA SaaS solutions Restructuring $ 87 $ 114 24 % — relates to the Company's 2022 - 2023 Geolocation Restructuring Program, more fully discussed in Note 11 to the consolidated financial statements Total non-operating (expense) income, net $ (202) $ (123) (64 %) — higher realized losses of $81 million on fixed-to-floating interest rate swaps resulting from higher interest rates (more fully discussed in Note 7 to the consolidated financial statements); — a $70 million gain on extinguishment of debt in in the prior year; and — a $20 million net increase in foreign exchange losses recorded during the year; partially offset by — an increase in interest income of $48 million related to higher cash balances and interest yields; — higher gains on certain of the Company's investments of $28 million; and — a $22 million benefit related to the resolutions of tax matters in the first quarter of 2023 Operating Margin 36.1 % 34.4 % 170BPS — operating margin and Adjusted Operating Margin (1) expansion is primarily due to revenue growth, partially offset by increases in operating and SG&A costs Adjusted Operating Margin (1) 43.9 % 42.6 % 130BPS ETR 16.9 % 21.9 % 500BPS — lower ETR primarily reflects tax benefits recognized in the first quarter of 2023, which resulted from the resolutions of UTPs in various U.S. and non-U.S. tax jurisdictions Diluted EPS $ 8.73 $ 7.44 17 % — increase in Diluted EPS and Adjusted Diluted EPS (1) is mostly attributable to growth in operating income/Adjusted Operating Income (1) coupled with a $0.76/share benefit related to the resolutions of tax matters in the first quarter of 2023, compared to $0.12/share for similar matters in the first quarter of 2022 Adjusted Diluted EPS (1) $ 9.90 $ 8.57 16 % 46 MOODY'S 2023 10-K Table of Contents Moody’s Corporation Year Ended December 31, % Change Favorable (Unfavorable) 2023 2022 Revenue: United States $ 3,098 $ 2,873 8 % Non-U.S.: EMEA 1,848 1,682 10 % Asia-Pacific 577 556 4 % Americas 393 357 10 % Total Non-U.S. 2,818 2,595 9 % Total 5,916 5,468 8 % Expenses: Operating 1,687 1,613 (5 %) SG&A 1,632 1,527 (7 %) Depreciation and amortization 373 331 (13 %) Restructuring 87 114 24 % Total 3,779 3,585 (5 %) Operating income 2,137 1,883 13 % Adjusted Operating Income (1) 2,597 2,328 12 % Interest expense, net (251) (231) (9 %) Other non-operating income, net 49 38 29 % Gain on extinguishment of debt — 70 (100 %) Non-operating (expense) income, net (202) (123) (64 %) Net income attributable to Moody’s $ 1,607 $ 1,374 17 % Diluted weighted average shares outstanding 184.0 184.7 — % Diluted EPS attributable to Moody’s common shareholders $ 8.73 $ 7.44 17 % Adjusted Diluted EPS (1) $ 9.90 $ 8.57 16 % Operating margin 36.1 % 34.4 % Adjusted Operating Margin (1) 43.9 % 42.6 % ETR 16.9 % 21.9 % GLOBAL REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ Global revenue ⇑ $448 million U.S.
Biggest changeYear Ended December 31, Financial measure: 2024 2023 % Change Favorable (Unfavorable) Insight and Key Drivers of Change Compared to Prior Year Moody's total revenue $ 7,088 $ 5,916 20 % — reflects growth in both segments MA external revenue $ 3,295 $ 3,056 8 % — sustained demand for KYC, insurance offerings and SaaS-based banking solutions; — ongoing strong retention for ratings data feeds and company data applications; and — continued demand and sales growth for credit and economic research product offerings MIS external revenue $ 3,793 $ 2,860 33 % reflects issuance growth across all LOBs resulting from: — favorable market conditions for issuers, due to sustained tight credit spreads and declining interest rates that drove strong refinancing activity; and — demand from investors as yields remained high for a majority of the year Total operating and SG&A expenses $ 3,680 $ 3,319 (11 %) — higher incentive and stock-based compensation aligned with financial and operating performance; and — higher salaries and benefits reflecting an increase in headcount and annual salary increases in both segments Depreciation and amortization $ 431 $ 373 (16 %) — higher amortization relating to internally developed software, primarily related to the development of MA SaaS solutions Restructuring $ 59 $ 87 32 % — relates to the Company's restructuring programs, more fully discussed in Note 9 to the consolidated financial statements Charges related to asset abandonment $ 43 $ — NM — costs related to the Company's decision to outsource the production of certain sustainability content utilized in our product offerings, which is more fully discussed in Note 22 to the consolidated financial statements Total non-operating (expense) income, net $ (176) $ (202) 13 % — an increase in interest income of $39 million due to higher cash and short-term investment balances and higher interest rates; and — a net decrease of $30 million in foreign exchange losses recorded during the year mainly attributable to an immaterial out-of-period adjustment relating to the 2022 fiscal year recorded in the first quarter of 2023; partially offset by: — an increase in tax-related interest expense of $21 million mainly due to the favorable resolution of tax matters in the prior year Operating Margin 40.6 % 36.1 % 450BPS — operating margin and Adjusted Operating Margin (1) expansion reflects strong revenue growth, particularly in MIS, outpacing operating and SG&A expense growth Adjusted Operating Margin (1) 48.1 % 43.9 % 420BPS ETR 23.7 % 16.9 % (680BPS) — higher ETR primarily reflects tax benefits recognized in the first quarter of 2023, which resulted from the resolutions of UTPs in various U.S. and non-U.S. tax jurisdictions Diluted EPS $ 11.26 $ 8.73 29 % — increase reflects growth in operating income/Adjusted Operating Income (1) driven mainly by increases in MIS revenue, partially offset by: — a $0.76 per share benefit in the prior year resulting from the resolutions of tax matters in the first quarter of 2023 Adjusted Diluted EPS (1) $ 12.47 $ 9.90 26 % MOODY'S 2024 10-K 43 Table of Contents Moody’s Corporation Year Ended December 31, % Change Favorable (Unfavorable) 2024 2023 Revenue: United States $ 3,836 $ 3,071 25 % Non-U.S.: EMEA 2,174 1,886 15 % Asia-Pacific 629 570 10 % Americas 449 389 15 % Total Non-U.S. 3,252 2,845 14 % Total 7,088 5,916 20 % Expenses: Operating 1,945 1,687 (15 %) SG&A 1,735 1,632 (6 %) Depreciation and amortization 431 373 (16 %) Restructuring 59 87 32 % Charges related to asset abandonment 43 — NM Total 4,213 3,779 (11 %) Operating income 2,875 2,137 35 % Adjusted Operating Income (1) 3,408 2,597 31 % Interest expense, net (237) (251) 6 % Other non-operating income, net 61 49 24 % Non-operating (expense) income, net (176) (202) 13 % Net income attributable to Moody’s $ 2,058 $ 1,607 28 % Diluted weighted average shares outstanding 182.7 184.0 1 % Diluted EPS attributable to Moody’s common shareholders $ 11.26 $ 8.73 29 % Adjusted Diluted EPS (1) $ 12.47 $ 9.90 26 % Operating margin 40.6 % 36.1 % Adjusted Operating Margin (1) 48.1 % 43.9 % ETR 23.7 % 16.9 % GLOBAL REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ Global revenue ⇑ $1,172 million U.S.
ARR excludes transaction sales including training, one-time services and perpetual licenses. In order to compare period-over-period ARR excluding the effects of foreign currency translation, the Company bases the calculation on currency rates utilized in its current year operating budget and holds these FX rates constant for the duration of all current and prior periods being reported.
ARR excludes transaction sales including one-time training, services and perpetual licenses. In order to compare period-over-period ARR excluding the effects of foreign currency translation, the Company bases the calculation on currency rates utilized in its current year operating budget and holds these FX rates constant for the duration of all current and prior periods being reported.
Those statements appear at various places throughout this annual report on Form 10-K, including in the sections entitled “Contingencies” under Item 7, “MD&A”, commencing on page 40 of this annual report on Form 10-K, under “Legal Proceedings” in Part I, Item 3, of this Form 10-K, and elsewhere in the context of statements containing the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “will,” “predict,” “potential,” “continue,” “strategy,” “aspire,” “target,” “forecast,” “project,” “estimate,” “should,” “could,” “may,” and similar expressions or words and variations thereof relating to the Company’s views on future events, trends and contingencies or otherwise convey the prospective nature of events or outcomes generally indicative of forward-looking statements.
Those statements appear at various places throughout this annual report on Form 10-K, including in the sections entitled “Contingencies” under Item 7, “MD&A”, commencing on page 38 of this annual report on Form 10-K, under “Legal Proceedings” in Part I, Item 3, of this Form 10-K, and elsewhere in the context of statements containing the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “will,” “predict,” “potential,” “continue,” “strategy,” “aspire,” “target,” “forecast,” “project,” “estimate,” “should,” “could,” “may,” and similar expressions or words and variations thereof relating to the Company’s views on future events, trends and contingencies or otherwise convey the prospective nature of events or outcomes generally indicative of forward-looking statements.
These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk Factors” in Part I, Item 1A of Moody’s annual report on Form 10-K for the year ended December 31, 2023, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein.
These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk Factors” in Part I, Item 1A of Moody’s annual report on Form 10-K for the year ended December 31, 2024, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein.
Contingencies Legal proceedings in which the Company is involved also may impact Moody’s liquidity or operating results. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Part II, Item 8 – “Financial Statements,” Note 21 “Contingencies” in this Form 10-K.
Contingencies Legal proceedings in which the Company is involved also may impact Moody’s liquidity or operating results. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Part II, Item 8 – “Financial Statements,” Note 19 “Contingencies” in this Form 10-K.
The table below shows the estimated effect that a one percentage-point decrease in each of these assumptions will have on Moody’s 2024 income before provision for income taxes. These effects have been calculated using the Company’s current projections of 2024 expenses, assets and liabilities related to Moody’s Retirement Plans, which could change as updated data becomes available.
The table below shows the estimated effect that a one percentage-point decrease in each of these assumptions will have on Moody’s 2025 income before provision for income taxes. These effects have been calculated using the Company’s current projections of 2025 expenses, assets and liabilities related to Moody’s Retirement Plans, which could change as updated data becomes available.
Additional information on these interest rate swaps is disclosed in Note 7 to the consolidated financial statements located in Item 8 of this Form 10-K. Moody’s cash equivalents consist of investments in high-quality investment-grade securities within and outside the U.S. with maturities of three months or less when purchased.
Additional information on these interest rate swaps is disclosed in Note 6 to the consolidated financial statements located in Item 8 of this Form 10-K. Moody’s cash equivalents consist of investments in high-quality investment-grade securities within and outside the U.S. with maturities of three months or less when purchased.
The Company manages both its U.S. and non-U.S. cash flow to maintain sufficient liquidity in all regions to effectively meet its operating needs. As a result of the Tax Act, all previously net undistributed foreign earnings have now been subject to U.S. tax. The Company continues to evaluate which entities it will indefinitely reinvest earnings outside the U.S.
The Company manages both its U.S. and non-U.S. cash flow to maintain sufficient liquidity in all regions to effectively meet its operating needs. As a result of the Tax Act, all previously net undistributed foreign earnings have now been subject to U.S. tax since 2017. The Company continues to evaluate which entities it will indefinitely reinvest earnings outside the U.S.
The discount rates used to measure the present value of the Company’s benefit obligation for its Retirement Plans as of December 31, 2023 were derived using a cash flow matching method whereby the Company compares each plan’s projected payment obligations by year with the corresponding yield on the FTSE pension discount curve.
The discount rates used to measure the present value of the Company’s benefit obligation for its Retirement Plans as of December 31, 2024 were derived using a cash flow matching method whereby the Company compares each plan’s projected payment obligations by year with the corresponding yield on the FTSE pension discount curve.
The cash flows by plan are then discounted back to present value to determine the discount rate applicable to each plan. Moody’s major assumptions vary by plan and assumptions used are set forth in Note 15 to the consolidated financial statements. In determining these assumptions, the Company consults with third-party actuaries and other advisors as deemed appropriate.
The cash flows by plan are then discounted back to present value to determine the discount rate applicable to each plan. Moody’s major assumptions vary by plan and assumptions used are set forth in Note 13 to the consolidated financial statements. In determining these assumptions, the Company consults with third-party actuaries and other advisors as deemed appropriate.
Discussions related to the year ended December 31, 2021 financial results and year-to-year comparisons between the years ended December 31, 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 .
Discussions related to the year ended December 31, 2023 financial results and year-to-year comparisons between the years ended December 31, 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 .
Contingencies Accounting for contingencies, including those matters described in Note 21 to the consolidated financial statements, is highly subjective and requires the use of judgments and estimates in assessing their magnitude and likely outcome. In many cases, the outcomes of such matters will be determined by third parties, including governmental or judicial bodies.
Contingencies Accounting for contingencies, including those matters described in Note 19 to the consolidated financial statements, is highly subjective and requires the use of judgments and estimates in assessing their magnitude and likely outcome. In many cases, the outcomes of such matters will be determined by third parties, including governmental or judicial bodies.
The Company regularly assesses the likely outcomes of such audits in order to determine the appropriateness of liabilities for UTPs. The Company classifies interest related to income taxes as a component of interest expense in the Company’s consolidated financial statements and associated penalties, if any, as part of other non-operating expenses.
The Company regularly assesses the likely outcomes of such audits in order to determine the appropriateness of liabilities for UTPs. The Company classifies interest related to income taxes as a component of interest expense in the Company’s consolidated statements of operations and associated penalties, if any, as part of other non-operating expenses.
Those factors, risks and uncertainties include, but are not limited to: – the impact of general economic conditions (including significant government debt and deficit levels, and inflation and related monetary policy actions by governments in response to inflation) on worldwide credit markets and on economic activity, including on the volume of mergers and acquisitions, and their effects on the volume of debt and other securities issued in domestic and/or global capital markets; MOODY'S 2023 10-K 65 Table of Contents – the uncertain effectiveness and possible collateral consequences of U.S. and foreign government initiatives and monetary policy to respond to the current economic climate, including instability of financial institutions, credit quality concerns, and other potential impacts of volatility in financial and credit markets; – the global impacts of the Russia-Ukraine military conflict and the military conflict in Israel and the surrounding areas on volatility in world financial markets, on general economic conditions and GDP in the U.S. and worldwide, on global relations and on the Company's own operations and personnel; – other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, increased utilization of technologies that have the potential to intensify competition and accelerate disruption and disintermediation in the financial services industry, as well as the number of issuances of securities without ratings or securities which are rated or evaluated by non-traditional parties; – the level of merger and acquisition activity in the U.S. and abroad; – the uncertain effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs, tax agreements and trade barriers; – the impact of MIS’s withdrawal of its credit ratings on countries or entities within countries and of Moody’s no longer conducting commercial operations in countries where political instability warrants such actions; – concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; – the introduction or development of competing and/or emerging technologies and products; – pricing pressure from competitors and/or customers; – the level of success of new product development and global expansion; – the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations; – the potential for increased competition and regulation in the jurisdictions in which we operate, including the EU; – exposure to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which Moody’s may be subject from time to time; – provisions in U.S. legislation modifying the pleading standards and EU regulations modifying the liability standards applicable to CRAs in a manner adverse to CRAs; – provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes; – uncertainty regarding the future relationship between the U.S. and China; – the possible loss of key employees and the impact of the global labor environment; – failures or malfunctions of our operations and infrastructure; – any vulnerabilities to cyber threats or other cybersecurity concerns; – the timing and effectiveness of our restructuring programs, such as the 2022 - 2023 Geolocation Restructuring Program; – currency and foreign exchange volatility; – the outcome of any review by tax authorities of Moody’s global tax planning initiatives; – exposure to potential criminal sanctions or civil remedies if Moody’s fails to comply with foreign and U.S. laws and regulations that are applicable in the jurisdictions in which Moody’s operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials; – the impact of mergers, acquisitions, such as our acquisition of RMS, or other business combinations and the ability of Moody’s to successfully integrate acquired businesses; – the level of future cash flows; – the levels of capital investments; and – a decline in the demand for credit risk management tools by financial institutions.
Those factors, risks and uncertainties include, but are not limited to: – the impact of general economic conditions (including significant government debt and deficit levels, and inflation and related monetary policy actions by governments in response to inflation) on worldwide credit markets and on economic activity, including on the level of merger and acquisition activity, and their effects on the volume of debt and other securities issued in domestic and/or global capital markets; – the uncertain effectiveness and possible collateral consequences of U.S. and foreign government initiatives and monetary policy to respond to the current economic climate, including instability of financial institutions, credit quality concerns, and other potential impacts of volatility in financial and credit markets; – the global impacts of the Russia-Ukraine military conflict and the military conflict in the Middle East on volatility in world financial markets, on general economic conditions and GDP in the U.S. and worldwide, on global relations and on the Company's own operations and personnel; – other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, increased utilization of technologies that have the potential to intensify competition and accelerate disruption and disintermediation in the financial services industry, as well as the number of issuances of securities without ratings or securities which are rated or evaluated by non-traditional parties; – the level of merger and acquisition activity in the U.S. and abroad; – the uncertain effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs, tax agreements and trade barriers; – the impact of MIS’s withdrawal of its credit ratings on countries or entities within countries and of Moody’s no longer conducting commercial operations in countries where political instability warrants such actions; – concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; – the introduction or development of competing and/or emerging technologies and products; – pricing pressure from competitors and/or customers; – the level of success of new product development and global expansion; – the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations; – the potential for increased competition and regulation in the jurisdictions in which we operate, including the EU; – exposure to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which Moody’s may be subject from time to time; – provisions in U.S. legislation modifying the pleading standards and EU regulations modifying the liability standards applicable to CRAs in a manner adverse to CRAs; – provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes; – uncertainty regarding the future relationship between the U.S. and China; – the possible loss of key employees and the impact of the global labor environment; – failures or malfunctions of our operations and infrastructure; – any vulnerabilities to cyber threats or other cybersecurity concerns; – the timing and effectiveness of our restructuring programs; – currency and foreign exchange volatility; 62 MOODY'S 2024 10-K Table of Contents – the outcome of any review by tax authorities of Moody’s global tax planning initiatives; – exposure to potential criminal sanctions or civil remedies if Moody’s fails to comply with foreign and U.S. laws and regulations that are applicable in the jurisdictions in which Moody’s operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials; – the impact of mergers, acquisitions, or other business combinations and the ability of Moody’s to successfully integrate acquired businesses; – the level of future cash flows; – the levels of capital investments; and – a decline in the demand for credit risk management tools by financial institutions, corporate or government entities.
In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. ITEM 7A.
Euro-denominated debt As of December 31, 2023, the Company has designated €500 million of the 2015 Senior Notes and €750 million of the 2019 Senior Notes as a net investment hedge to mitigate FX exposure relating to euro denominated net investments in subsidiaries.
Euro-denominated debt As of December 31, 2024, the Company has designated €500 million of the 2015 Senior Notes and €750 million of the 2019 Senior Notes as a net investment hedge to mitigate FX exposure relating to euro denominated net investments in subsidiaries.
A hypothetical change of 100 BPS in the SOFR-based swap rate would result in an approximate $275 million change to the fair value of the swaps, which would be offset by the change in fair value of the hedged item.
A hypothetical change of 100 BPS in the SOFR-based swap rate would result in an approximate $161 million change to the fair value of the swaps, which would be offset by the change in fair value of the hedged item.
As permitted under ASC Topic 715, the Company amortizes the impact of asset returns over a five-year period for purposes of calculating the market-related value of assets that is used in determining the expected return on assets’ component of annual expense and in calculating the total unrecognized gain or loss subject to MOODY'S 2023 10-K 43 Table of Contents amortization.
As permitted under ASC Topic 715, the Company amortizes the impact 40 MOODY'S 2024 10-K Table of Contents of asset returns over a five-year period for purposes of calculating the market-related value of assets that is used in determining the expected return on assets’ component of annual expense and in calculating the total unrecognized gain or loss subject to amortization.
Cross-currency swaps As of December 31, 2023, the Company had cross-currency swaps designated as hedges of euro denominated net investments in subsidiaries, for which the notional values and corresponding interest rates are disclosed in Note 7 to the consolidated financial statements located in Item 8 of this Form 10-K.
Cross-currency swaps As of December 31, 2024, the Company had cross-currency swaps designated as hedges of euro denominated net investments in subsidiaries, for which the notional values and corresponding interest rates are disclosed in Note 6 to the consolidated financial statements located in Item 8 of this Form 10-K.
As of December 31, 2023, approximately 52% of Moody’s assets were located outside the U.S., making the Company susceptible to fluctuations in FX rates. The effects of translating assets and liabilities of non-U.S. operations with non-U.S. functional currencies to the U.S. dollar are charged or credited to OCI.
As of December 31, 2024, approximately 49% of Moody’s assets were located outside the U.S., making the Company susceptible to fluctuations in FX rates. The effects of translating assets and liabilities of non-U.S. operations with non-U.S. functional currencies to the U.S. dollar are charged or credited to OCI.
For additional information on the Company's outstanding debt, CP program and 2021 Facility, refer to Note 18 to the consolidated financial statements. Management may consider pursuing additional long-term financing when it is appropriate in light of cash requirements for operations, share repurchases and other strategic opportunities, which could result in higher financing costs.
For additional information on the Company's outstanding debt, CP program and 2024 Credit Facility, refer to Note 16 to the consolidated financial statements. Management may consider pursuing additional long-term financing when it is appropriate in light of cash requirements for operations, share repurchases and other strategic opportunities, which could result in higher financing costs.
The cost of debt and equity is weighted based on the debt to market capitalization ratio of publicly traded companies with similarities to the reporting unit being tested. The WACC for all reporting units ranged from 8.0% to 8.5% as of July 31, 2021.
The cost of debt and equity is weighted based on the debt to market capitalization ratio of publicly traded companies with similarities to the reporting unit being tested. The WACC for all reporting units ranged from 10.0% to 10.5% as of July 31, 2024.
For Moody’s Retirement Plans, the total actuarial losses as of December 31, 2023 that have not been recognized in annual expense are $72 million, and Moody’s expects the net periodic expense related to the amortization of net actuarial (losses)/gains will be immaterial in 2024.
For Moody’s Retirement Plans, the total actuarial losses as of December 31, 2024 that have not been recognized in annual expense are $48 million, and Moody’s expects the net periodic expense related to the amortization of net actuarial (losses)/gains will be immaterial in 2025.
In 2023, approximately 41% of the Company’s revenue and approximately 38% of the Company's expenses were denominated in functional currencies other than the U.S. dollar, principally in the British pound and the euro. As such, the Company is exposed to market risk from changes in FX rates.
In 2024, approximately 39% of the Company’s revenue and approximately 38% of the Company's expenses were denominated in functional currencies other than the U.S. dollar, principally in the British pound and the euro. As such, the Company is exposed to market risk from changes in FX rates.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains Forward-Looking Statements. See “Forward-Looking Statements” commencing on page 65 and Item 1A. “Risk Factors” commencing on page 25 for a discussion of uncertainties, risks and other factors associated with these statements.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains Forward-Looking Statements. See “Forward-Looking Statements” commencing on page 61 and Item 1A. “Risk Factors” commencing on page 23 for a discussion of uncertainties, risks and other factors associated with these statements.
Based on current projections, the Company estimates that expenses related to Retirement Plans will be immaterial in 2024. Investments in Non-consolidated Affiliates Equity method investments are reviewed for indicators of other-than-temporary impairment on a quarterly basis. These investments are written down to fair value if there is evidence of a loss in value that is other-than-temporary.
Based on current projections, the Company estimates that net periodic expense related to Retirement Plans will be immaterial in 2025. Investments in Non-consolidated Affiliates Equity method investments are reviewed for indicators of other-than-temporary impairment on a quarterly basis. These investments are written down to fair value if there is evidence of a loss in value that is other-than-temporary.
The repayment schedule for the Company’s borrowings outstanding at December 31, 2023 is as follows: Future interest payments and fees associated with the Company's debt and credit facility are expected to be $5.0 billion, of which approximately $300 million is expected to be paid in each of the next five years, and the remaining amount expected to be paid thereafter.
The repayment schedule for the Company’s borrowings outstanding at December 31, 2024 is as follows: Future interest payments and fees associated with the Company's debt and credit facility are expected to be $4.7 billion, of which approximately $300 million is expected to be paid in each of the next five years, and the remaining amount expected to be paid thereafter.
The cost of equity is based on a risk-free interest rate and an equity risk factor, which is derived from public companies similar to the reporting unit and which captures the perceived risks and uncertainties associated with the reporting unit’s cash flows.
The WACC is calculated based on the proportionate weighting of the cost of debt and equity. The cost of equity is based on a risk-free interest rate and an equity risk factor, which is derived from public companies similar to the reporting unit and which captures the perceived risks and uncertainties associated with the reporting unit’s cash flows.
As of December 31, 2023, these purchase obligations totaled $788 million, of which approximately 40% is expected to be paid in the next twelve months and another approximate 45% expected to be paid over the next two subsequent years, with the remainder to be paid thereafter.
As of December 31, 2024, these purchase obligations totaled $716 million, of which approximately 45% is expected to be paid in the next twelve months and another approximate 45% expected to be paid over the next two subsequent years, with the remainder to be paid thereafter.
Material Cash Requirements The Company's material cash requirements consist of the following contractual and other obligations: Financing Arrangements Indebtedness At December 31, 2023, Moody’s had $7.0 billion of outstanding debt and approximately $1 billion of additional capacity available under the Company’s CP program, which is backstopped by the $1.25 billion 2021 Facility.
Material Cash Requirements The Company's material cash requirements consist of the following contractual and other obligations: Financing Arrangements Indebtedness At December 31, 2024, Moody’s had $7.4 billion of outstanding debt and approximately $1 billion of additional capacity available under the Company’s CP program, which is backstopped by the $1.25 billion 2024 Credit Facility.
(dollars in millions) Assumptions Used for 2024 Estimated Impact on 2024 Income before Provision for Income Taxes (Decrease)/Increase Weighted Average Discount Rates (1) 4.73%/4.75% $ (4) Weighted Average Assumed Compensation Growth Rate 3.60% $ 1 Assumed Long-Term Rate of Return on Pension Assets 6.10% $ (5) (1) Weighted average discount rates of 4.73% and 4.75% for pension plans and Other Retirement Plans, respectively.
(dollars in millions) Assumptions Used for 2025 Estimated Impact on 2025 Income before Provision for Income Taxes (Decrease) Increase Weighted Average Discount Rates (1) 5.43%/5.40% $ (4) Weighted Average Assumed Compensation Growth Rate 3.60% $ 1 Assumed Long-Term Rate of Return on Pension Assets 6.60% $ (5) (1) Weighted average discount rates of 5.43% and 5.40% for pension plans and Other Retirement Plans, respectively.
The following table shows the impact to the fair value of the forward contracts if currencies being purchased were to weaken by 10%: Foreign Currency Forwards (1) Impact on fair value of contract Sell Buy U.S. dollar British pound $52 million unfavorable impact U.S. dollar Canadian dollar $14 million unfavorable impact U.S. dollar Euro $6 million unfavorable impact U.S. dollar Singapore dollar $5 million unfavorable impact U.S. dollar Indian rupee $2 million unfavorable impact U.S. dollar Japanese yen $1 million unfavorable impact Canadian dollar U.S. dollar $2 million favorable impact $78 million unfavorable impact (1) Refer to Note 7 to the consolidated financial statements in Item 8 of this Form 10-K for further detail on the forward contracts.
The following table shows the impact to the fair value of the forward contracts if currencies being purchased were to weaken by 10%: Foreign Currency Forwards (1) Impact on fair value of contract Sell Buy U.S. dollar British pound $59 million unfavorable impact U.S. dollar Singapore dollar $4 million unfavorable impact U.S. dollar Canadian dollar $3 million unfavorable impact U.S. dollar Japanese yen $2 million unfavorable impact U.S. dollar Indian Rupee $2 million unfavorable impact Euro U.S. dollar $1 million unfavorable impact $71 million unfavorable impact (1) Refer to Note 6 to the consolidated financial statements in Item 8 of this Form 10-K for further detail on the forward contracts.
As of December 31, 2023, the Company has an unrecognized loss of $71 million, of which $10 million will be recognized in the market-related value of assets that is used to calculate the expected return on assets component of 2024 expense.
As of December 31, 2024, the Company has an unrecognized loss of $68 million, of which $19 million will be recognized in the market-related value of assets that is used to calculate the expected return on assets component of 2025 expense.
A tax position that meets this more-likely-than-not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
A tax position that meets this more-likely- MOODY'S 2024 10-K 39 Table of Contents than-not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
To the extent that changes in rated issuance volumes had a material impact to MIS's revenue compared to the prior year, those impacts are discussed below. 54 MOODY'S 2023 10-K Table of Contents MOODY'S INVESTORS SERVICE REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ MIS: Global revenue ⇑ $161 million U.S. Revenue ⇑ $116 million Non-U.S.
To the extent that changes in rated issuance volumes had a material impact to MIS's revenue compared to the prior year, those impacts are discussed below. MOODY'S 2024 10-K 51 Table of Contents MOODY'S INVESTORS SERVICE REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ MIS: Global revenue ⇑ $933 million U.S. Revenue ⇑ $696 million Non-U.S.
Diluted EPS ⇑ $1.29 Adjusted Diluted EPS ⇑ $1.33 Both diluted EPS and Adjusted Diluted EPS (1) growth is mostly attributable to higher operating income and Adjusted Operating Income (1) , the components of which are more fully described above.
Diluted EPS ⇑ $2.53 Adjusted Diluted EPS ⇑ $2.57 Both diluted EPS and Adjusted Diluted EPS (1) growth is mostly attributable to higher operating income and Adjusted Operating Income (1) , the components of which are more fully described above.
Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements.
Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking MOODY'S 2024 10-K 61 Table of Contents statements.
Cash and cash equivalents and short-term investments The Company’s aggregate cash and cash equivalents and short-term investments of $2.2 billion at December 31, 2023 included approximately $1.7 billion located outside of the U.S. Approximately 43% of the Company’s aggregate cash and cash equivalents and short-term investments is denominated in EUR and GBP.
Cash and cash equivalents and short-term investments The Company’s aggregate cash and cash equivalents and short-term investments of $3.0 billion at December 31, 2024 included approximately $1.7 billion located outside of the U.S. Approximately 33% of the Company’s aggregate cash and cash equivalents and short-term investments is denominated in EUR and GBP.
Differences in the WACC used between reporting units is primarily due to MOODY'S 2023 10-K 41 Table of Contents distinct risks and uncertainties regarding the cash flows of the different reporting units. A sensitivity analysis of the WACC was performed on all reporting units as of July 31, 2021 for each reporting unit.
Differences in the WACC used between reporting units is primarily due to distinct risks and uncertainties regarding the cash flows of the different reporting units. A sensitivity analysis of the WACC was performed on all reporting units as of July 31, 2024 for each reporting unit.
Below is a reconciliation of the Company’s net cash flows from operating activities to Free Cash Flow: Year ended December 31, 2023 2022 Net cash provided by operating activities $ 2,151 $ 1,474 Capital additions (271) (283) Free Cash Flow $ 1,880 $ 1,191 Net cash used in investing activities $ (247) $ (262) Net cash used in financing activities $ (1,584) $ (1,208) 64 MOODY'S 2023 10-K Table of Contents Key Performance Metrics: The Company presents ARR on a constant currency organic basis for its MA business as a supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time.
Below is a reconciliation of the Company’s net cash flows from operating activities to Free Cash Flow: Year ended December 31, 2024 2023 Net cash provided by operating activities $ 2,838 $ 2,151 Capital additions (317) (271) Free Cash Flow $ 2,521 $ 1,880 Net cash used in investing activities $ (1,056) $ (247) Net cash used in financing activities $ (1,446) $ (1,584) Key Performance Metrics: The Company presents ARR on a constant currency organic basis for its MA business as a supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time.
Depreciation and amortization The increase in depreciation and amortization expense primarily reflects higher amortization of internally developed software relating to the development of SaaS-based solutions. Restructuring The restructuring charges in both periods relate to the Company's 2022 - 2023 Geolocation Restructuring Program as more fully discussed in Note 11 to the consolidated financial statements.
Depreciation and amortization The increase in depreciation and amortization expense primarily reflects higher amortization of internally developed software relating to the development of SaaS-based solutions. Restructuring The restructuring charges relate to the Company's restructuring programs as more fully discussed in Note 9 to the consolidated financial statements.
New factors may emerge from time to time, and it is not possible for the Company to predict new factors, nor can the 66 MOODY'S 2023 10-K Table of Contents Company assess the potential effect of any new factors on it.
New factors may emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it.
Revenue ⇑ $80 million Global DS revenue for the for the years ended December 31, 2023 and 2022 was comprised as follows : Global DS revenue grew 11% and reflects increases in both the U.S. (11%) and internationally (11%).
Revenue ⇑ $113 million Global DS revenue for the for the years ended December 31, 2024 and 2023 was comprised as follows : Global DS revenue grew 10% and reflects increases in both the U.S. (4%) and internationally (14%).
The aforementioned factors contributed to overall ARR (2) growth for DS of 11%. MOODY'S 2023 10-K 51 Table of Contents RESEARCH AND INSIGHTS REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ R&I: Global revenue ⇑ $72 million U.S. Revenue ⇑ $20 million Non-U.S.
The aforementioned factors contributed to overall ARR (2) growth for DS of 12%. 48 MOODY'S 2024 10-K Table of Contents RESEARCH AND INSIGHTS REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ R&I: Global revenue ⇑ $42 million U.S. Revenue ⇑ $24 million Non-U.S.
The following is a summary of the changes in the Company’s cash flows followed by a brief discussion of these changes: Year Ended December 31, $ Change Favorable/ (unfavorable) 2023 2022 Net cash provided by operating activities $ 2,151 $ 1,474 $ 677 Net cash used in investing activities $ (247) $ (262) $ 15 Net cash used in financing activities $ (1,584) $ (1,208) $ (376) Free Cash Flow (1) $ 1,880 $ 1,191 $ 689 (1) Free Cash Flow is a non-GAAP measure and is defined by the Company as net cash provided by operating activities minus cash paid for capital additions.
The following is a summary of the changes in the Company’s cash flows followed by a brief discussion of these changes: Year Ended December 31, $ Change Favorable/ (unfavorable) 2024 2023 Net cash provided by operating activities $ 2,838 $ 2,151 $ 687 Net cash used in investing activities $ (1,056) $ (247) $ (809) Net cash used in financing activities $ (1,446) $ (1,584) $ 138 Free Cash Flow (1) $ 2,521 $ 1,880 $ 641 (1) Free Cash Flow is a non-GAAP measure and is defined by the Company as net cash provided by operating activities minus cash paid for capital additions.
Dividends and share repurchases On February 5, 2024, the Board approved the declaration of a quarterly dividend of $0.85 per share for Moody’s common stock, payable March 15, 2024 to shareholders of record at the close of business on February 23, 2024.
Dividends and share repurchases On February 12, 2025, the Board approved the declaration of a quarterly dividend of $0.94 per share for Moody’s common stock, payable March 14, 2025 to shareholders of record at the close of business on February 25, 2025.
For each reporting unit analyzed, a 10% reduction in the revenue growth rates used would still result in fair values that significantly exceeded carrying values. – WACC - The WACC is the rate used to discount each reporting unit’s estimated future cash flows. The WACC is calculated based on the proportionate weighting of the cost of debt and equity.
A sensitivity analysis of the revenue growth rates was performed on all reporting units. For each reporting unit analyzed, a 10% reduction in the revenue growth rates used would still result in fair values that significantly exceeded carrying values. – WACC - The WACC is the rate used to discount each reporting unit’s estimated future cash flows.
If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate $138 million unfavorable adjustment to OCI related to these net investment hedges. This adjustment would be offset by favorable translation adjustments on the Company’s euro net investment in subsidiaries.
If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate $129 million unfavorable adjustment to OCI related to these net investment hedges.
Adjusted Operating Income excludes the impact of: i) depreciation and amortization; and ii) restructuring charges/adjustments. Depreciation and amortization are excluded because companies utilize productive assets of different useful lives and use different methods of acquiring and depreciating productive assets. Restructuring charges/adjustments are excluded as the frequency and magnitude of these charges may vary widely across periods and companies.
Adjusted Operating Income excludes the impact of: i) depreciation and amortization; ii) restructuring charges/adjustments; and iii) charges related to asset abandonment. Depreciation and amortization are excluded because companies utilize productive assets of different useful lives and use different methods of acquiring and depreciating productive assets.
Revenue ⇑ $15 million Global CFG revenue for the years ended December 31, 2023 and 2022 was comprised as follows : * Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.
Revenue ⇑ $165 million Global CFG revenue for the years ended December 31, 2024 and 2023 was comprised as follows : * Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue. 52 MOODY'S 2024 10-K Table of Contents The increase in CFG revenue of 39% reflects increases in both the U.S (40%) and internationally (37%).
The Company defines Adjusted Operating Margin as Adjusted Operating Income divided by revenue. 62 MOODY'S 2023 10-K Table of Contents Year ended December 31, 2023 2022 Operating income $ 2,137 $ 1,883 Adjustments: Depreciation and amortization 373 331 Restructuring 87 114 Adjusted Operating Income $ 2,597 $ 2,328 Operating margin 36.1 % 34.4 % Adjusted Operating Margin 43.9 % 42.6 % Adjusted Net Income and Adjusted Diluted EPS attributable to Moody’s common shareholders: The Company presents Adjusted Net Income and Adjusted Diluted EPS because management deems these metrics to be useful measures to provide additional perspective on Moody's operating performance.
Year ended December 31, 2024 2023 Operating income $ 2,875 $ 2,137 Adjustments: Depreciation and amortization 431 373 Restructuring 59 87 Charges related to asset abandonment 43 — Adjusted Operating Income $ 3,408 $ 2,597 Operating margin 40.6 % 36.1 % Adjusted Operating Margin 48.1 % 43.9 % MOODY'S 2024 10-K 59 Table of Contents Adjusted Net Income and Adjusted Diluted EPS attributable to Moody’s common shareholders: The Company presents Adjusted Net Income and Adjusted Diluted EPS because management deems these metrics to be useful measures to provide additional perspective on Moody's operating performance.
DATA AND INFORMATION REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ D&I: Global revenue ⇑ $77 million U.S. Revenue ⇑ $31 million Non-U.S. Revenue ⇑ $46 million Global D&I revenue increased 11% compared to 2022 and reflects growth in both the U.S.
DATA AND INFORMATION REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ D&I: Global revenue ⇑ $64 million U.S. Revenue ⇑ $25 million Non-U.S. Revenue ⇑ $39 million Global D&I revenue increased 8% compared to 2023 and reflects growth in both the U.S.
Management believes that the exclusion of the aforementioned items, as detailed in the reconciliation below, allows for an additional perspective on the Company’s operating results from period to period and across companies.
Refer to Notes 9 and 22 to the consolidated financial statements for further information regarding the nature of the Company’s restructuring programs and asset abandonment, respectively. Management believes that the exclusion of the aforementioned items, as detailed in the reconciliation below, allows for an additional perspective on the Company’s operating results from period to period and across companies.
MOODY'S 2023 10-K 59 Table of Contents Interest rate and credit risk: Interest rate swaps designated as a fair value hedge: The Company’s interest rate risk management objectives are to reduce the funding cost and volatility to the Company and to alter the interest rate exposure to a desired risk profile.
This adjustment would be offset by favorable translation adjustments on the Company’s euro net investment in subsidiaries. 56 MOODY'S 2024 10-K Table of Contents Interest rate and credit risk: Interest rate swaps designated as a fair value hedge: The Company’s interest rate risk management objectives are to reduce the funding cost and volatility to the Company and to alter the interest rate exposure to a desired risk profile.
Cash flows for the five years subsequent to the date of the quantitative goodwill impairment test were utilized in the determination of the fair value of each reporting unit. The growth rates assumed a gradual increase in revenue based on new customer acquisition and new products.
Cash flows for the five years subsequent to the date of the quantitative goodwill impairment test were utilized in the determination of the fair value of each reporting unit. Beyond five years, a terminal value was determined using a perpetuity growth rate based on inflation and real GDP growth rates.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions, which are more fully described below. In addition, the Company also makes certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of its reporting units.
In addition, the Company also makes certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of its reporting units.
This plan is overfunded at December 31, 2023, and accordingly holds sufficient investments to fund future benefit obligations. Payments for the Company's unfunded plans are not expected to be material in either the short or long-term. For further information on the Company's pension and other retirement plan obligations, refer to Note 15 to the consolidated financial statements.
Payments for the 58 MOODY'S 2024 10-K Table of Contents Company's unfunded plans are not expected to be material in either the short or long-term. For further information on the Company's pension and other retirement plan obligations, refer to Note 13 to the consolidated financial statements.
MOODY'S 2023 10-K 49 Table of Contents Segment Results Moody’s Analytics The table below provides a summary of revenue and operating results, followed by further insight and commentary: Year Ended December 31, % Change Favorable (Unfavorable) 2023 2022 Revenue: Decision Solutions (DS) $ 1,383 $ 1,245 11 % Research and Insights (R&I) 884 812 9 % Data and Information (D&I) 789 712 11 % Total external revenue 3,056 2,769 10 % Intersegment revenue 13 8 63 % Total MA Revenue 3,069 2,777 11 % Expenses: Operating and SG&A (external) 1,946 1,763 (10 %) Operating and SG&A (intersegment) 186 174 (7 %) Total operating and SG&A expense 2,132 1,937 (10 %) Adjusted Operating Income $ 937 $ 840 12 % Adjusted Operating Margin 30.5 % 30.2 % Depreciation and amortization 298 250 (19 %) Restructuring 59 49 (20 %) MOODY'S ANALYTICS REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ MA: Global revenue ⇑ $287 million U.S.
This was partially offset by a $0.76 per share benefit in the prior year related to the resolution of tax matters in the first quarter of 2023. 46 MOODY'S 2024 10-K Table of Contents Segment Results Moody’s Analytics The table below provides a summary of revenue and operating results, followed by further insight and commentary: Year Ended December 31, % Change Favorable (Unfavorable) 2024 2023 Revenue: Decision Solutions (DS) $ 1,516 $ 1,383 10 % Research and Insights (R&I) 926 884 5 % Data and Information (D&I) 853 789 8 % Total external revenue 3,295 3,056 8 % Intersegment revenue 13 13 — % Total MA Revenue 3,308 3,069 8 % Expenses: Operating and SG&A (external) 2,101 1,946 (8 %) Operating and SG&A (intersegment) 193 186 (4 %) Total operating and SG&A expense 2,294 2,132 (8 %) Adjusted Operating Income $ 1,014 $ 937 8 % Adjusted Operating Margin 30.7 % 30.5 % Depreciation and amortization 353 298 (18 %) Restructuring 42 59 29 % Charges related to asset abandonment 43 — NM MOODY'S ANALYTICS REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ MA: Global revenue ⇑ $239 million U.S.
Year ended December 31, Amounts in millions 2023 2022 Net income attributable to Moody’s common shareholders $ 1,607 $ 1,374 Pre-tax Acquisition-Related Intangible Amortization Expenses $ 198 $ 200 Tax on Acquisition-Related Intangible Amortization Expenses (48) (47) Net Acquisition-Related Intangible Amortization Expenses 150 153 Pre-tax restructuring $ 87 $ 114 Tax on restructuring (22) (26) Net restructuring 65 88 Pre-tax gain on extinguishment of debt $ — $ (70) Tax on gain on extinguishment of debt — 17 Net gain on extinguishment of debt — (53) FX losses resulting from the Company no longer conducting commercial operations in Russia — 20 Adjusted Net Income $ 1,822 $ 1,582 MOODY'S 2023 10-K 63 Table of Contents Year ended December 31, 2023 2022 Diluted earnings per share attributable to Moody’s common shareholders $ 8.73 $ 7.44 Pre-tax Acquisition-Related Intangible Amortization Expenses $ 1.08 $ 1.08 Tax on Acquisition-Related Intangible Amortization Expenses (0.26) (0.25) Net Acquisition-Related Intangible Amortization Expenses 0.82 0.83 Pre-tax restructuring $ 0.47 $ 0.62 Tax on restructuring (0.12) (0.14) Net restructuring 0.35 0.48 Pre-tax gain on extinguishment of debt $ — $ (0.38) Tax on gain on extinguishment of debt — 0.09 Net gain on extinguishment of debt — (0.29) FX losses resulting from the Company no longer conducting commercial operations in Russia — 0.11 Adjusted Diluted EPS $ 9.90 $ 8.57 Note: the tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates.
Year ended December 31, Amounts in millions 2024 2023 Net income attributable to Moody’s common shareholders $ 2,058 $ 1,607 Pre-tax Acquisition-Related Intangible Amortization Expenses $ 198 $ 198 Tax on Acquisition-Related Intangible Amortization Expenses (48) (48) Net Acquisition-Related Intangible Amortization Expenses 150 150 Pre-tax restructuring $ 59 $ 87 Tax on restructuring (15) (22) Net restructuring 44 65 Pre-tax charges related to asset abandonment $ 43 $ — Tax on charges related to asset abandonment (11) — Net charges related to asset abandonment 32 — Pre-tax gain on previously held equity method investments $ (7) $ — Tax on gain on previously held equity method investments 2 — Net gain on previously held equity method investments (5) — Adjusted Net Income $ 2,279 $ 1,822 Year ended December 31, 2024 2023 Diluted earnings per share attributable to Moody’s common shareholders $ 11.26 $ 8.73 Pre-tax Acquisition-Related Intangible Amortization Expenses $ 1.08 $ 1.08 Tax on Acquisition-Related Intangible Amortization Expenses (0.26) (0.26) Net Acquisition-Related Intangible Amortization Expenses 0.82 0.82 Pre-tax restructuring $ 0.32 $ 0.47 Tax on restructuring (0.08) (0.12) Net restructuring 0.24 0.35 Pre-tax charges related to asset abandonment $ 0.24 $ — Tax on charges related to asset abandonment (0.06) — Net charges related to asset abandonment 0.18 — Pre-tax gain on previously held equity method investments $ (0.04) $ — Tax on gain on previously held equity method investments 0.01 — Net gain on previously held equity method investments (0.03) — Adjusted Diluted EPS $ 12.47 $ 9.90 60 MOODY'S 2024 10-K Table of Contents Note: the tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates.
Reportable Segments The Company is organized into two reportable segments at December 31, 2023: MA and MIS, which are more fully described in the section entitled “The Company” above and in Note 22 to the consolidated financial statements. 44 MOODY'S 2023 10-K Table of Contents Results of Operations This section of this Form 10-K generally discusses the year ended December 31, 2023 and 2022 financial results and year-to-year comparisons between these years.
Reportable Segments The Company is organized into two reportable segments at December 31, 2024: MA and MIS, which are more fully described in the section entitled “The Company” above and in Note 20 to the consolidated financial statements.
Goodwill and Other Acquired Intangible Assets At July 31st of each year, Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MA and MIS), or one level below an operating segment (i.e., a component of an operating segment). 40 MOODY'S 2023 10-K Table of Contents The Company has four reporting units: two reporting units within MA consisting of businesses that offer: i) data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions, and two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations).
The Company has four reporting units: two reporting units within MA consisting of businesses that offer: i) data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions, and two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations).
MOODY'S 2023 10-K 53 Table of Contents Moody’s Investors Service The table below provides a summary of revenue and operating results, followed by further insight and commentary: Year Ended December 31, % Change Favorable (Unfavorable) 2023 2022 Revenue: Corporate finance (CFG) $ 1,404 $ 1,269 11 % Structured finance (SFG) 405 462 (12 %) Financial institutions (FIG) 545 491 11 % Public, project and infrastructure finance (PPIF) 476 431 10 % Total ratings revenue 2,830 2,653 7 % MIS Other 30 46 (35 %) Total external revenue 2,860 2,699 6 % Intersegment royalty 186 174 7 % Total 3,046 2,873 6 % Expenses: Operating and SG&A (external) 1,373 1,377 — % Operating and SG&A (intersegment) 13 8 (63 %) Total operating and SG&A expense 1,386 1,385 — % Adjusted Operating Income $ 1,660 $ 1,488 12 % Adjusted Operating Margin 54.5 % 51.8 % Depreciation and amortization 75 81 7 % Restructuring 28 65 57 % The following chart presents changes in rated issuance volumes compared to 2022.
Charges related to asset abandonment Reflects costs related to the Company's decision to outsource the production of certain sustainability content utilized in our product offerings, which is more fully discussed in Note 22 to the consolidated financial statements. 50 MOODY'S 2024 10-K Table of Contents Moody’s Investors Service The table below provides a summary of revenue and operating results, followed by further insight and commentary: Year Ended December 31, % Change Favorable (Unfavorable) 2024 2023 Revenue: Corporate finance (CFG) $ 1,950 $ 1,404 39 % Structured finance (SFG) 518 405 28 % Financial institutions (FIG) 727 545 33 % Public, project and infrastructure finance (PPIF) 564 476 18 % Total ratings revenue 3,759 2,830 33 % MIS Other 34 30 13 % Total external revenue 3,793 2,860 33 % Intersegment royalty 193 186 4 % Total 3,986 3,046 31 % Expenses: Operating and SG&A (external) 1,579 1,373 (15 %) Operating and SG&A (intersegment) 13 13 — % Total operating and SG&A expense 1,592 1,386 (15 %) Adjusted Operating Income $ 2,394 $ 1,660 44 % Adjusted Operating Margin 60.1 % 54.5 % Depreciation and amortization 78 75 (4 %) Restructuring 17 28 39 % The following chart presents changes in rated issuance volumes compared to 2023.
SFG REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ SFG: Global revenue ⇓ $57 million U.S. Revenue ⇓ $56 million Non-U.S. Revenue ⇓ $1 million Global SFG revenue for the years ended December 31, 2023 and 2022 was comprised as follows: The decrease in SFG revenue of 12% reflected declines in both the U.S. (18%) and internationally (1%).
SFG REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ SFG: Global revenue ⇑ $113 million U.S. Revenue ⇑ $116 million Non-U.S. Revenue ⇓ $3 million Global SFG revenue for the years ended December 31, 2024 and 2023 was comprised as follows: The increase in SFG revenue of 28% reflects growth in the U.S.
Amounts in millions December 31, 2023 December 31, 2022 Change Growth MA ARR Decision Solutions Banking $ 418 $ 385 $ 33 9% Insurance 533 482 51 11% KYC 326 279 47 17% Total Decision Solutions $ 1,277 $ 1,146 $ 131 11% Research and Insights 879 819 60 7% Data and Information 806 733 73 10% Total MA ARR $ 2,962 $ 2,698 $ 264 10% Recently Issued Accounting Pronouncements Refer to Note 2 to the consolidated financial statements located in Part II, Item 8 on this Form 10-K for a discussion on the impact to the Company relating to recently issued accounting pronouncements.
Amounts in millions December 31, 2024 December 31, 2023 Change Growth MA ARR Decision Solutions Banking $ 457 $ 420 $ 37 9% Insurance 601 536 65 12% KYC 390 334 56 17% Total Decision Solutions $ 1,448 $ 1,290 $ 158 12% Research and Insights 942 885 57 6% Data and Information 888 821 67 8% Total MA ARR $ 3,278 $ 2,996 $ 282 9% Recently Issued Accounting Pronouncements Refer to Note 2 to the consolidated financial statements located in Part II, Item 8 on this Form 10-K for a discussion on the impact to the Company relating to recently issued accounting pronouncements.
(2) Refer to the section entitled "Key Performance Metrics" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric.
(2) Refer to the section entitled "Key Performance Metrics" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric. 42 MOODY'S 2024 10-K Table of Contents Year ended December 31, 2024 compared with year ended December 31, 2023 Executive Summary The following table provides an executive summary of key operating results for the year ended December 31, 2024.
MOODY'S 2023 10-K 61 Table of Contents Leases The Company has remaining payments related to its operating leases of $442 million at December 31, 2023, primarily related to real estate leases, of which $118 million in payments are expected over the next twelve months.
Leases The Company has remaining payments related to its operating leases of $478 million at December 31, 2024, primarily related to real estate leases, of which $111 million in payments are expected over the next twelve months. For more information on the expected cash flows relating to the Company's operating leases, refer to Note 18 to the consolidated financial statements.
Sources of Funding to Satisfy Material Cash Requirements The Company believes that it has the financial resources needed to meet its cash requirements and expects to have positive operating cash flow in 2024. Cash requirements for periods beyond the next twelve months will depend, among other things, on the Company’s profitability and its ability to manage working capital requirements.
Cash requirements for periods beyond the next twelve months will depend, among other things, on the Company’s profitability and its ability to manage working capital requirements. The Company may also borrow from various sources as described above.
Restructuring The restructuring charges in both periods relate to the Company's 2022 - 2023 Geolocation Restructuring Program as more fully discussed in Note 11 to the consolidated financial statements.
Restructuring The amounts reflect charges and adjustments related to the Company's restructuring programs as more fully discussed in Note 9 to the consolidated financial statements.
Methodologies and significant estimates utilized in determining the fair value of reporting units: The following is a discussion regarding the Company’s methodology for determining the fair value of its reporting units, excluding ICRA, at July 31, 2021 (the date of the last quantitative assessment).
Other assets and liabilities, including applicable corporate assets, are allocated to the extent they are related to the operation of respective reporting units. 38 MOODY'S 2024 10-K Table of Contents Methodologies and significant estimates utilized in determining the fair value of reporting units: The following is a discussion regarding the Company’s methodology for determining the fair value of its reporting units, excluding ICRA, as of July 31, 2024.
Revenue ⇑ $26 million Non-U.S. Revenue ⇑ $19 million Global PPIF revenue for the years ended December 31, 2023 and 2022 was comprised as follows: The 10% increase in PPIF revenue reflected growth in both the U.S. (10%) and internationally (12%), which resulted in an increase in transaction revenue of $38 million compared to 2022.
MOODY'S 2024 10-K 53 Table of Contents FIG REVENUE 2024 --------------------------------------------------------------------------------------- 2023 _________________________________________________ _________ ______________________________________________ FIG: Global revenue ⇑ $182 million U.S. Revenue ⇑ $133 million Non-U.S. Revenue ⇑ $49 million Global FIG revenue for the years ended December 31, 2024 and 2023 was comprised as follows: The increase in FIG revenue of 33% reflects growth in both the U.S.
Revenue ⇑ $109 million Non-U.S. Revenue ⇑ $178 million The 10% increase in global MA revenue reflects growth both in the U.S.
Revenue ⇑ $765 million Non-U.S. Revenue ⇑ $407 million Growth in global revenue reflected increases in both MA and MIS, both in the U.S. and internationally.
Transaction revenue increased $115 million compared to the prior year, with the most notable drivers reflecting: – higher leveraged finance (speculative-grade bonds and bank loans) and investment-grade rated issuance volumes reflecting both refinancing activity and issuance to fund M&A transactions compared to suppressed issuance activity in these sectors in the prior year.
Transaction revenue increased $528 million compared to the prior year, with continued momentum in leveraged finance (which includes bank loans and speculative-grade bonds) and investment-grade issuance.
The continued payment of dividends at this rate, or at all, is subject to the discretion of the Board. On February 7, 2022, the Board approved $750 million in share repurchase authority. At December 31, 2023, the Company had approximately $359 million of remaining authority.
The continued payment of dividends at this rate, or at all, is subject to the discretion of the Board. On February 5, 2024, the Board of Directors authorized $1 billion in share repurchase authority. On October 15, 2024, the Board authorized an additional $1.5 billion in share repurchase authority.
The aforementioned factors also contributed to ARR (2) growth of 10% for D&I. 52 MOODY'S 2023 10-K Table of Contents MA: Operating and SG&A Expense ⇑ $183 million Compensation expenses of $1,238 million increased $122 million: Non-compensation expenses of $708 million increased $61 million: — the growth in salaries and benefits reflects higher headcount and annual salary increases to support business growth; and — the increase is mostly attributable to operating growth, including investments to support technology, innovation and product development. — the increase in incentive and performance-based equity compensation aligns with actual/expected financial and operational performance as well as headcount growth.
MOODY'S 2024 10-K 49 Table of Contents MA: Operating and SG&A Expense ⇑ $155 million Compensation expenses of $1,370 million increased $132 million: Non-compensation expenses of $731 million increased $23 million: — the growth in salaries and benefits reflects higher headcount and annual salary increases to support business growth; and — the modest increase is mostly attributable to costs to support operating growth, including investments in technology and innovation — the increase in incentive and stock-based compensation is driven by higher headcount and financial and operating performance MA: Adjusted Operating Margin 30.7% ⇑ 20BPS Modest Adjusted Operating Margin expansion for MA is primarily due to the 8% increase in global MA revenue, offset by an 8% increase in operating and SG&A expenses.
On February 5, 2024, the Board of Directors authorized an additional $1 billion in share repurchase authority. There is no established expiration date for the remaining authorizations. Restructuring As more fully discussed in Note 11 to the consolidated financial statements, the Company has substantially completed the 2022 - 2023 Geolocation Restructuring Program.
At December 31, 2024, the Company had approximately $1.6 billion of remaining authority under these authorizations. There is no established expiration date for the remaining authorizations. Restructuring As more fully discussed in Note 9 to the consolidated financial statements, the Company is currently in the process of executing the Strategic and Operational Efficiency Restructuring Program.
Revenue ⇑ $24 million Global FIG revenue for the years ended December 31, 2023 and 2022 was comprised as follows: The increase in FIG revenue of 11% reflected growth in both the U.S. (13%) and internationally (9%) which resulted in a $43 million increase in transaction revenue compared to 2022.
Revenue ⇑ $21 million 54 MOODY'S 2024 10-K Table of Contents Global PPIF revenue for the years ended December 31, 2024 and 2023 was comprised as follows: The 18% increase in PPIF revenue reflects increases in both the U.S. (23%) and internationally (11%). Transaction revenue increased $83 million compared to 2023, primarily due to: – higher issuance from U.S.
Adjusted Net Income and Adjusted Diluted EPS exclude the impact of: i) amortization of acquired intangible assets; ii) restructuring charges/adjustments; iii) a gain on the extinguishment of debt; and iv) FX translation losses reclassified to earnings resulting from the Company no longer conducting commercial operations in Russia.
Adjusted Net Income and Adjusted Diluted EPS exclude the impact of: i) amortization of acquired intangible assets; ii) restructuring charges/adjustments; iii) charges related to asset abandonment; and iv) gains on previously held equity method investments.
(9%) and internationally (12%) across all LOBs. – ARR (2) increased 10% reflecting strong growth across all LOBs. 50 MOODY'S 2023 10-K Table of Contents DECISION SOLUTIONS REVENUE 2023 --------------------------------------------------------------------------------------- 2022 _________________________________________________ _________ ______________________________________________ DS: Global revenue ⇑ $138 million U.S. Revenue ⇑ $58 million Non-U.S.
Revenue ⇑ $69 million Non-U.S. Revenue ⇑ $170 million The 8% increase in global MA revenue reflects growth both in the U.S. (5%) and internationally (10%) across all LOBs. – ARR (2) increased 9% reflecting strong growth across all LOBs.
Interest Expense, net ⇑ $20 million Other non-operating income ⇑ $11 million Increase in expense is primarily due to: The most notable drivers of the increase in income are: — higher realized losses of $81 million on fixed-to-floating interest rate swaps resulting from higher interest rates (more fully discussed in Note 7 to the consolidated financial statements); partially offset by — higher gains on certain of the Company's investments of $28 million; partially offset by — a $20 million net increase in foreign currency losses mainly attributable to an immaterial out-of-period adjustment relating to the 2022 fiscal year, partially offset by foreign currency translation losses reclassified to earnings in 2022 resulting from the Company no longer conducting commercial operations in Russia. — higher interest income of $48 million reflecting higher cash balances and interest yields; and — a $22 million benefit related to the resolutions of tax matters in the first quarter of 2023.
Interest Expense ⇓ $14 million Other non-operating income ⇑ $12 million The decrease in interest expense is primarily due to: The most notable drivers of the increase in income are: — higher interest income of $39 million reflecting higher cash and short-term investment balances and interest yields; partially offset by: — a $30 million net decrease in foreign currency losses mainly attributable to an immaterial out-of-period adjustment relating to the 2022 fiscal year recorded in the first quarter of 2023; partially offset by: — an increase of $21 million in tax-related interest mainly reflecting the favorable resolution of tax matters in the prior year — a benefit of $9 million in the prior year related to the favorable resolution of various tax matters ETR ⇑ 680BPS The increase in the ETR primarily reflects $113 million in tax benefits recognized in the first quarter of 2023, which resulted from the resolutions of UTPs in various U.S. and non-U.S. tax jurisdictions that did not recur in 2024.
Operating margin 36.1%, up 170 BPS Adjusted Operating Margin 43.9%, up 130 BPS Operating Margin and Adjusted Operating Margin (1) expansion primarily reflects revenue growth offset by an increase in operating and SG&A expenses.
Operating margin 40.6%, up 450 BPS Adjusted Operating Margin 48.1%, up 420 BPS Increases in both Operating margin and Adjusted Operating Margin (1) are due to strong revenue growth, particularly within MIS, partially offset by an increase in operating and SG&A expenses.

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